ECON 203 – Formula Sheet – Complete Macroeconomics Formula Summary for Exam Preparation

Formulas econ 203




 % Average growth rate (annual): [(Vt=n /Vt=1)(1/n) -1] x 100
 Output gap: Y – Y*
 Output gap rate: ((Y-Y*)/Y*) X 100
 GDPPC = (GDP/POPULATION)
 Growth rate of GDPPC = % of GDP - % of POPULATION
 LFPR: (LF/AWP) x 100
 E RATE : (E/AWP) x 100
 U RATE : (U/LF) x 100
 Y = Y* → full employment → national U rate
 Y – Y* < 0 → under employment
 Y – Y* > 0 → over employment
 Labour productivity: Y/L
 Capital production: Y/K
 Inflation (pi only for econ 203) = %∆CPI
((CPI1 – CPI0)/CPI0) x 100

 Difference between real (𝜋) and nominal (i)
𝜋=i–𝜋
 NX = X – IM
 ∆𝑋 / ∆𝑒 > 0 → positive
 ∆𝐼𝑀 / ∆𝑒 < 0 → negative
 ∆𝑁𝑋 / ∆𝑒 > 0 → positive
 ΣProfits = Σ(TRevenue-TCost)
 Expenditure approach (very important):
Formula: GDP = Y = C + I + G + NX (NX = X – IM)
 Net investment (Inet) = gross investment (IGross) – Depreciation of capital
 GDP= C + I (Gross investment) + G + NX
 Real GDP = (GDP nominal/ GDP deflator) x 100
OR

Real GDP = (GDP nominal/ CPI) x 100

 GDP = Y = C + I → CHAPTER 6
 GDP = Y = C + I + G +NX (X-IM) → CHAPTER 7
 Aggregate Expenditure: AE = C + I → CHAPTER 6