Formulas for Macroeconomics | The Economics Classroom

FORMULAS FOR MACROECONOMICS

Key Formulas in Macroeconomics SEARCH FOR A
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1. GDP = C + I + G + Xn:  The expenditure approach to measuring GDP
2. GDP = W + I + R + P: The income approach to measuring GDP
3. Calculating nominal GDP: The quantity of various goods produced in a nation times their
current prices, added together. WATCH VIDEOS ON…
4. GDP deflator: A price index used to adjust nominal GDP to arrive at real GDP. Called the
‘deflator’ because nominal GDP will usually over-state the value of a nation’s output if there Select
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has been inflation.

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5. Real GDP: WEEKLY LESSON
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6. GDP Growth rate: Enter your Email

7. The inflation rate via the CPI:

8. Real interest rate = nominal interest rate – inflation rate. Subscribe me!

9. Unemployment Rate = Preview | Powered by

10. Money Multiplier = FeedBlitz

11. Quantity theory of money: MV = PY – a moneterist’s view which explains how changes in the
money supply will affect the price level assuming the velocity of money and the level of output
are fixed. WELKER’S PAGES
12. MPC + MPS = 1. Households may consume or save with any change in their income. Welcome to the Economics

13. Spending Multiplier = Classroom

14. Tax multiplier = -MPCMPS. It tells you how much total spending will result from an initial
change in the level of taxation. It is negative because when taxes decrease, spending Economics Dictionary
increases, and vis versa. The tax multiplier will always be smaller than the spending multiplier.
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