22 Macroeconomics formulas you need to know for the Exam
Updated 4/13/2021 Jacob Reed
Below you will find all the formulas you need to know for Macro Economics. Unfortunately for some, the Macro exam is a little more math heavy than the Micro exam. But fear not, the list below is all you need. If you need some explanations, checkout the video too!
GDP Formulas
Output Expenditure Model
GDP=C+Ig+G+(X-M)= Consumption + Gross Investment + Government Spending+ (Exports – Imports)
Income Approach
GDP = Compensation of Employees + Rents + Interest + Proprietors Income + Corporate Profits + Taxes on Imports + Statistical Discrepancy – Consumption of Fixed Capital
Inflation Formulas
Inflation = Nominal % change – Real % change
Real % Change = Nominal % change – Inflation
CPI = New Market Basket Value/Base Market Basket Value x 100
Deflator = Nominal Value/Real Value x 100
Inflation rate = (New Index – Old Index) / Old Index x 100
Real value = Nominal Value/Index x 100
Banking Formulas
Money Multiplier = 1 / Reserve Requirement
Quantity of Money Theory: Nominal GDP=M x V = P x Y
Time Value of Money
Future Value = Present Value + (Present Value x Interest Rate)
Present Value ≈ Future Value – (Future Value x Interest Rate)