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Equations for Exam II
Note: I am attempting to be comprehensive with this list, but may have missed something.
If you come across an
equation that is not on the list, please ask whether or not you should add it to the list for memorization.
Chapter 5 Equations
GDP = C + I + G + NX
GDP equation from the product approach
NX = X – IM
net exports equation
Know how to calculate nominal GDP, constant dollar real GDP, and GDP growth rates.
The formulas are given on
the “Calculating Nominal and Real GDP…” sheet
Know how to calculate price index values, inflation rates, and real wages.
The formulas are given on the
“Procedures Guide: Constant Weight Price Index, Inflation…” sheet
S ≡ I
closed economy identity between saving and investment
S ≡ I + NX
open economy identity between saving and investment
gross domestic investment = gross domestic private investment (I) + government investment (G
I
)
foreign borrowing = IM  X
net saving in an open economy =
gross saving – depreciated manufactured capital
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This homework help was uploaded on 04/07/2008 for the course ECON 101 taught by Professor Madden during the Spring '08 term at Millersville.
 Spring '08
 Madden

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