Macro Equations Flashcards
1
Q
How to calculate % change between index numbers when neither is base year?
A
Change in index points
———————————- x 100
Original index number
2
Q
How to see that National income is increasing / decreasing?
A
Increasing = Injections > withdrawals Decreasing = withdrawals < Injections
3
Q
How to see when National income is in equilibrium?
A
injections = withdrawals
4
Q
How to calculate Multiplier?
A
Initial change in C, I, G or x-m
Or
. 1
———– = K
1 - MPC
4
Q
How to calculate Multiplier?
A
Initial change in component of aggregate demand
Or
k = 1
————————————————–
1 - Marginal propensity to consume
5
Q
How to calculate current account balance?
A
(Balance of trade in goods + services)
+
(Balance of primary + secondary income)
