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Econ Mid-Term 1Formulas, Equations, and Calculations

Econ Mid-Term 1Formulas, Equations, and Calculations - 3...

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Econ Mid-Term 1: Formulas, Equations, and Calculations Consumer Surplus: area below the Demand curve and above the Market Price Producer Surplus: Above Supply and Below the Market Price Total Surplus: CS + PS Area of a trapezoid= ½ b(i+j) Inflation Rate: IR= CPI2-CPI1/CPI1 x 100 Growth Rate: GR= Q2-Q1/Q1 x 100 Unemployment Rate: unemployed/labor force x 100 Participation rate: labor force/ population x 100 Price Index: PI = cost of basket in year x/ cost of basket in base year x 100
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Unformatted text preview: 3 Ways to Calculate GDP • Expenditure: add together expenditures of final goods Y= Consumers + Investments+Govt+exports - imports • Income: add together incomes of consumers Y=Wages + Rents +Interests + Profits • Value added: adding value of sale price minus value of intermediates Y=Revenue-Cost of intermediates RGDP= GDP/CPI x 100 RGDP pc =RGDP/pop. Productivity: RGDP/employment...
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