Equations

GDP = Gross Domestic Product Y = C + I + G + NX GDP Deflator = ((nominal GDP) / (real GDP)) * 100
 * Nominal GDP - use current year prices
 * Base GDP - use base year prices
 * Y = GDP
 * C = Consumption
 * I = Investment
 * G = Government Spending
 * NX = Net Exports (Exports - Imports)

Percent Change = ((Year 2 - Year 1) / (Year 1)) * 100

U-rate (unemployment rate) = ((# of unemployed) / (labor force)) * 100

Labor force participation rate = ((labor force) / (adult population)) * 100

CPI (Consumer Price Index) = ((cost of basket in current year) / (cost of basket in base year)) * 100

Inflation rate = ((CPI this year - CPI last year) / (CPI last year)) * 100

Amount in today's dollars = (amount in year T dollars) * ((price level today) / (price level in year T))

Real Wage: (W / P) = ($15/hour) / ($5/unit of output) = 3 units output per hour Quantity Equation: (M * V) = (P * Y)
 * 1 / P is the value of $1, measured in goods
 * A relative price is the price of one good relative to (divided by) another

Velocity of Money: V = (P * Y) / M
 * M = money supply
 * V = velocity
 * P = price
 * Y = real GDP

Fisher Effect: (nominal interest rate) = (inflation rate) + (real interest rate)

Wealth Effect: P rises, C falls

Interest Rate Effect: P rises, I falls

Exchange Rate Effect: P rises, NX falls

Y = Yn + a Production Function: Y = AF(L, K, H, N)
 * Y = real GDP
 * Yn = Natural Rate of Output
 * a = the deviation, defined as (actual price level - expected price level)
 * When P deviates from the Expected Price, Y deviates from the Natural Rate of Output

Private Saving: Y - T - C

Public Saving: T - G

National Saving: (Y - T - C) + (T - G) or Y - C - G

Future Value of Money: FV = PV(1 + r)^N Present Value of Money: PV = FV / ((1 + r)^N)
 * FV = Future Value
 * PV = Present Value
 * r = interest rate
 * N = number of time periods

The Money Multiplier = 1 / R The Multiplier Effect: 1 / (1 - MPC)
 * R = reserve ratio
 * MPC = Marginal Propensity to Consume