formulas

Question 1

The “Law of Diminishing Returns” can be expressed as:

Answer 1

𝜕^2Fi / 𝜕L^2 < 0
for L sufficiently large

• which makes the demand curve downward-sloping

Question 2

If Fi

is discrete, then VMPL

Answer 2

VMPL ≡ Pi (Δ Qi / Δ L)

-> niet volledig!

Question 3

If Fi is differentiable in L, then VMPL

Answer 3

VMPL ≡ Pi (𝜕Fi / 𝜕L)

Question 4

☞ Population of working age:

Answer 4

N^w = L + U + N^i

= N^a + N^i

Question 5

Activity Rate

Answer 5

a ≡ N^a/ N^w

= (L + U) / (L + U + N^i)

Question 6

Employment Rate

Answer 6

l ≡ L / N^w
= L / (L + U + N^i)
= a (1 − u)

Question 7

Unemployment Rate

Answer 7

u ≡ U / N^a

= U / (L + U)

Question 8

Active Population

Answer 8

N^a ≡ L + U

Question 9

Value Added

Answer 9

VAit ≡ (Pit * Qit) − CIit

Question 10

GDP Deflator

Answer 10

GDPDt|to ≡ NGDPt/ RGDPt|to
(often multiplied by 100)

              = overall price level of produced final 
                 G&S

Question 11

Consumer Price Index (CPIt|to)

Answer 11

Cost of the basket in period t
≡ _____________________________ (× 100)
Cost of the basket in the base period to

Question 12

Inflation Rate

Answer 12

The inflation rate between periods t1 and t2 is

𝜋t1,t2 ≡ (Pt2 |t0 / Pt1 |t0) − 1

Question 13

real GDP

Answer 13

RGDP = NGDP / GDPD

Question 14

Real price of a good

Answer 14

= Nominal price of this good / Price index

Question 15

Real wage

Answer 15

= Nominal wage / Price index

Question 16

real interest rate r

Answer 16

rt+1 =
(Purchasing power in t + 1 / Purchasing power in t)− 1
≈ i − 𝜋t+1

Question 17

Growth Factor

Answer 17

The (cumulative) growth factor of x between t − k and t equals
Γ(t−k,t) ^x
≡ xt / xt− k

Question 18

Growth Rate

Answer 18

The (cumulative) growth rate of x between t − k and t equals

Xt−k,t ≡ Xt − Xt−k / Xt−k
= (Xt / Xt−k) − 1

Question 19

Average Growth Factor

Answer 19

⟨Γ^x⟩t−k,t ≡ (Xt / Xt−k) ^(1/k)

Question 20

Rule of 70

Answer 20

Doubling time =~ 70 / Average growth rate (expressed in %)

Question 21

GDP (decomposition)

Answer 21

= Per-capita GDP · Population
= GDP/L * L/N^w * N^w/N * N
= Labour productivity * Employment rate * Population pyramidv* Population size

Question 22

production function: (Cobb-Douglas Function), In the Cobb-Douglas case, the per-capita production
function is

Answer 22

Yt = At Kt^(1−𝛼) Lt^𝛼
≡ Yt/ Nt

where 0 < 𝛼 < 1

Question 23

Employed Population Share

Answer 23

𝜆 ≡ L/N

= L/N^W * N^W/N

Question 24

Employment rate

Answer 24

L/ N^W ≡ Employed / Working-Age Population

Question 25

Population pyramid

Answer 25

N/ W^N ≡ Working-Age Population / Total Population