Important Formula Macro Exam 3
Important Formula Macro Exam 3 EC 111
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This 2 page Study Guide was uploaded by Carter Cox on Sunday April 17, 2016. The Study Guide belongs to EC 111 at University of Alabama - Tuscaloosa taught by Zirlott in Spring 2015. Since its upload, it has received 138 views. For similar materials see Principles of Macroeconomics in Economcs at University of Alabama - Tuscaloosa.
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Date Created: 04/17/16
Important Formulas Exam 3 Money Multiplier (1/ Reserve Ration) Leverage Ration (Reserve + Loans + Securities)/ Capital Value of $1 measured in goods - (1/P) Relative Price - Price of one good divide by the other goo - CD 15 dollars and Pizza is 10 dollars o 15/10 Real Wage - (W/P) o W= Nominal Wage= Price of Labor o P= Price level= Price of Goods and services Velocity Of Money - V= (P x Y)/ M o (P x Y) = Nominal GDP o M = Money Supply o V = Velocity Quantity Equation (represents Entire Economy) - (M x V) = (P x Y) o M = Money Supply o V = Velocity o (P x Y) = Nominal GDP Fisher Effect - Nominal interest Rate = Inflation Rate + Real Interest Rate National Income and National Saving (Open Economy) - National Income o Y = C + I + G + NX (from a preceding chapter) - Open Economy o S = I + NCO S = Saving I = Investment NCO = Net Capital Outflow - NX = NCO Real Exchange Rate - (e x P)/ P* o e = Nominal Exchange Rate o P = Domestic Price o P* = Foreign Price Market of Loanable Funds - S = I + NCO o Supply = S o Demand = I + NCO Market for Foreign Currency Exchange - NX = NCO o NX = Demand for dollars o NCO = supply of dollars Reserve Ratio - R = Reserves/ Deposits Money Supply - Currency + Deposits Net Exports - Export – Imports Savings - Y – C – G PPP - e = P*/ P - Shouldn’t have to calculate on test tomorrow E - Real Value of a dollar in the market for foreign currency exchange
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