February 10, 2017 -FRQ Formulas Review
7:53 PM
FRQ Review - 2/10/17
- Included in GDP - Newly produced goods, goods and services produced and sold by foreigners within our domestic borders. Both tangible goods and intangible services (haircut, housecleaning). Measures only productions within the confines of the country.
- Excluded from GDP - Intermediate goods and services, which are used in the production of final goods and services, goods produced in previous years, and foreign products.
Formulas
GDP = C+I+G+( X - M)
private consumption + gross investment + government investment + government spending +
Net exports (exports - imports)
Budget Deficit/Surplus = Gov purchases + Gov transfer payments - Gov tax/fee collection
Trade Surplus/Deficit = Exports - Imports
National Income = Wage of employee + Rent income + Interest income + Proprietors income + Corporate profits
Disposable Income = National income - Personal house taxes + Gov transfer payments
3. Employment Rate = In the labor force, includes part-time but not full-time students
# of unemployed / # of labor force (unemployed + employed) X 100
4. Inflation Rate = A general rise of prices; reduces the “purchasing power” of money
Current year price index - base year price index / base year price index X 100
5. Nominal and Real GDP -
Nominal GDP - The value of output produced in current prices; can increase from year to year if either output or prices increase.
Real GDP - The value of output produced in constant base year prices.
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