University:
College of the Holy Cross
Course:
ECON 110 | Principles of Economics
Academic year:

2021
Views:

332

Pages:

2
Author:

Edgar Rowe

Basic Equations Used in HSC Economics Ag Aggreg greg gregate ate D Dema ema emand nd nd:: AD = C+I+G+(X-M) AD= Aggregate Demand C = Consumer Spending I = Investment Spending G = Government Spending X = Exports M = Spending on imports Eq Equilib uilib uilibrium rium rium:: (Derived from AD=Y) S+T+M=I+G+X Leakages = Injections Sim Simple ple Mult Multiplier iplier iplier:: 𝑀𝑃𝑆 + 𝑀𝑃𝐶 = 1 MPC= Marginal Propensity to consume MPS=Marginal Propensity to Save Ag Aggreg greg gregate ate S Supp upp upply: ly: Y= C+S+T Y= Aggregate Supply C=Consumer Spending S= Household Saving M= Imports 𝑘= 1 1 = 𝑀𝑃𝑆 1 − 𝑀𝑃𝐶 K= Simple Multiplier ∆𝑌 = 𝑘 ∙ ∆𝐴𝐷 Eco Econom nom nomic ic Gr Growth owth (%): = [𝑅𝑒𝑎𝑙 𝐺𝐷𝑃 (𝑐𝑢𝑟𝑟𝑒𝑛𝑡 ) − 𝑅𝑒𝑎𝑙 𝐺𝐷𝑃(𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠 ) ∙ 100 𝑅𝑒𝑎𝑙 (𝐺𝐷𝑃 𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠) Inf Inflatio latio lation n Rat Ratee (%) (%):: CPI= Consumer Price Index = 𝐶𝑃𝐼(𝐶𝑢𝑟𝑟𝑒𝑛𝑡) − 𝐶𝑃𝐼(𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠) ∙ 100 𝐶𝑃𝐼(𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠) Lab Labour our Forc Forcee Par Particip ticip ticipatio atio ation n Rat Rate: e: = 𝐿𝑎𝑏𝑜𝑢𝑟 𝐹𝑜𝑟𝑐𝑒 ∙ 100 𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 Un Unemp emp employm loym loyment ent R Rate: ate: = 𝑁𝑜. 𝑜𝑓 𝑝𝑒𝑜𝑝𝑙𝑒 𝑈𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑 ∙ 100 𝑇𝑜𝑡𝑎𝑙 𝐿𝑎𝑏𝑜𝑢𝑟 𝐹𝑜𝑟𝑐𝑒 Bala Balance nce of P Paym aym ayment ent entss (BOP (BOP): ): Total = Credit - Debit BOP= CA+KAFA Current Account (CA) = Balance of Good and Services + Net Primary Income + Net Secondary Income =BOGS+NPY+NSY Where BOGS = Net goods + Net services Capital and Financial Account (KAFA) = Capital Account + Investment Ter Terms ms ooff Tra Trade de In Index: dex: = 𝐸𝑥𝑝𝑜𝑟𝑡 𝑃𝑟𝑖𝑐𝑒 𝐼𝑛𝑑𝑒𝑥 𝐼𝑚𝑝𝑜𝑟𝑡 𝑃𝑟𝑖𝑐𝑒 𝐼𝑛𝑑𝑒𝑥 ∙ 100 Gin Ginii Co Coefficie efficie efficient: nt: 𝐺𝑖𝑛𝑖 𝐶𝑜𝑒𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑡 = 𝐴 𝐴+𝐵