Exam 2-4 Cheat Sheet
Exam 2-4 Cheat Sheet EC202
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This 3 page Study Guide was uploaded by Thomas Chadwick on Tuesday February 10, 2015. The Study Guide belongs to EC202 at Michigan State University taught by Professor Obst in Fall. Since its upload, it has received 448 views. For similar materials see Macro economics in Economcs at Michigan State University.
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Date Created: 02/10/15
Econ Exam Notes Formulas Lesson 2 Standard of living OutputPerson Average Labor Productivity Output Worker Lesson 3 Vaue Added Method Add up value added by each industry to calculate GDP OutputInput Market Values Expenditure Method Measure of GDP that measures quantities of goods services purchased Income Method Adding up all income generated by production of output GDP Add up only nal goods Rea GDP use base year prices Private Saving Spr Y TaxesConsumption Pubic Saving SPU Taxes Government Purchases Nationa Saving S Y Consumption Government Purchases Labor Force Employed Unemployed Unempoyment Rate Unemployed Labor Force Participation Rate Labor Force Working Age Population Lesson 4 CPI Cost of Current CPI BasketBase CPI Basket 100 Uses Base Year Current Year CPI Previous Year CPI Previous Year CPI In ation Rate Nominal Wage Z 1 Real Wage Rate CPI x 00 39 DP Rea GDP Mmoo PriceIndex Baance of Bank Account Ending Balancenitia Deposit1nterest Rate Rea Interest Rate New Year Purchasing Power Base Year Purchasing Power Base Year Purchasing Power De ating Nominal PricePrice IndexBase Year Price which is 100 GDP De ator PNGDPRGDP1OO Purchasing Power Dollar Amount Price Index items Rea GDP uses base year prices Lesson 5 Reserve Deposit Ratiobank reserves deposits Price 3 be paid bond X 1 Interest Rate 2 Principal Ammount Future ValuePresent Value 1i Lesson 6 Output Gap YY Recessionary Gap YgtY YYgt0 positive output gap Expansionary Gap YltY YYlt0 negative output gap in ationary Cyclical Unemployment Actual UnemploymentlU Nat Unemp Natura Unemployment Frictional Structural Recession UU is positive ugtu Expansion UU is negative ultu Actual Unemp Natural Unemp 100 Okun s Law 2X Y GDPX Answer Equation of Exchange MVPY Lesson 7 PAE CPGNX Actual Investment Planned investment Ip Unplanned nvestmentu Consumption Function C39cY TC39 cTcY Margina Propensity to Consume gtYdY T ChC MPCy ChY ChT Margnal Tax Rate ChY Marginal Expenditure Rate Af E 1 AYE M It 39 v U 39D W l MER AG Unintended Investment Output PAE Symbols Lesson 3 Y GDP or output or income C consumption expenditure I in vestment 6 government purchasesa ow variables that are italicized NX net exports X exports M imports d domestic purchases f foreign purchases De cit is a ow variable CGNXY GDP Government Measure Savings SNX and SY CG Notes Section 2 to Section 4 Duration Length of the unemployment scale Unemployment Spell Period in which an individual is constantly unemployed begins when you start to actually look for employment and ends when you nd leave job Monetary Policy Changes in the money supply and is controlled by the central bank Structural Policy Government s policy aimed at changing the structure policy of the nation s economy Fiscal Policy Decisions that determine the government s budget expenditures goodservices and revenues taxes of the governments Real wages to decline when prices increase more than nominal wages increase Section 5 to Section 7 M1 Currency in checking accounts travelers checks M2 M1 Saving Acc mutual Changes in planned spending happen in the short run Money used as a yardstick Unit of an account
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