Change in value / Average value

[Ending value-beginning value] / [(ending value+beginning value) / 2]

Change in Demand / Change in Price

**Not percent

Total Revenue - Total Economic Costs

Total Economic Costs aka explicit + implicit cost

MRP of labor = change in total revenue / change in quantity of labor

Marginal product * Product price (when a firm's in perfect competition)

Profits are maximized when:

(MRP₁ / Price of input 1) = (MRP_n / Price of input n)

Computes the aggregate market share of the N largest firms in the industry.

Ratio will equal 0 for perfect competition and 100 for a monopoly

Adds up the squares of the market shares of each of the largest N companies in the market.

Equals 1 for a monopoly.

Value of goods and services included in GDP measured at current prices

Nominal GDP = quantity produced in Year t * Prices in Year t

Refers to the value of goods included in GDP measured at base-year prices

Real GDP = Quantity produced in Year t * Base-year prices

[Value of current year output at current year prices / value of current year output at base year prices] * 100

[Nominal GDP / Real GDP] * 100

GDP = C + I + G + (X - M)

C = consumer spending on final goods and services

I = gross private domestic investment, which includes business investment in capital goods and changes in inventory

G = government spending on final goods and services

X = exports

M = imports

GDP = consumer spending on goods and services

+ Business gross fixed investment

+ Change in inventories

+ Government spending on goods and services

+ Government gross fixed investment

+ Exports - imports

+ Statistical discrepancy

Sum of incomes received by all factors of production used to generate final output

Employee compensation, corporate and government enterprise profits before taxes, interest income, rent and unincorporated business net income, indirect business taxes less subsidies

Accounts for the wear and tear or depreciation that occurs in capital stock during the production process.

Represents the amount that must be reinvested by the company in the business to maintain current productivity levels

Personal income - personal taxes

aka

Houseold consumption + Household saving

S = I + (G - T) + (X - M)

S is savings? I is investment or income?

Relationship between income and the Real Interest Rate

Disposable income = GDP - Business saving - Net taxes

S - I = (G - T) + (X - M)

MV = PY M/P and Md/P = kY

Where:

k = I/V

M = Nominal money supply

M_d = Nominal money demand

M_d/P is referred to as real money demand and M/P is real money supply

Y = AF(L,K)

Where:

Y = aggregate output

L = quantity of labor

K = quantity of capital

A = technological knowledge or total factor productivity (TFP)

Growth in potential GDP = Growth in technology + W_L(Growth in Labor) + W_K(Growth in Capital)

Growth in per capital potential GDP = Growth in technology + W_K(Growth in capital-labor ratio

ULC = W/O

Where:

O = output per hour per worker

W = total labor compensation per hour per worker

Nominal interest rate (R_N) reflects the real interest rate (R_R) and the expected inflation rate (∏^C)

R_N = R_R + ∏^C

Ignoring taxes:

1/(1-MPC)

Assuming taxes:

1/[1 - MPC(1-t)]

Current Account

Capital Account

Financial Account

S_DC/FC * (P_FC / P_DC)

S_DC/FC = Nominal Spot exchange rate

P_FC = foreign price level (quoted in terms of the foreign currency)

P_DC = Domestic price level (qutoed in terms of the domestic currency)

F_DC/FC = (1 / S_FC/DC) * [(1 + r_DC) / (1 + r_FC)]

or

F_DC/FC = S_DC/FC * [(1 + r_DC) / (1 + r_FC)]

F_t = S_t+1

[(S_{t + 1}) / S] - 1 = % change in S(DC/FC)_t + 1 = (r_DC - r_FC) / (1 + r_FC)

ω_Xε_X + ω_M(ε_M - 1) > 0

Where:

ω_X = Share of exports in total trade

ω_M = Share of imports in total trade

ε_X = Price elasticity of demand for exports

ε_M = Price elasticity of demand for imports