Calculations

• Price Elasticity of Demand (PED) Calculation

  percentage change in quantity / percentage change in price
• Change in Price Calculation

  (final price - initial price) / initial price
• Change in Quantity Calculation

  (final quantity - initial quantity) / initial quantity
• Change in Total Revenue Calculation

  final price x quantity - initial price x quantity / initial price x quantity
• Keynesian Multiplier Calculation

  1 / (1 - MPC)
• Effect on GDP of a Change in an Injection using the Keynesian Multiplier Calculation

  change in GDP x keynesian multiplier
• Marginal Propensities Calculations

  MPC + MPS + MPT + MPM = 1

  MPC + MPW = 1
• Indirect Tax Value Calculation

  % tax x value
• Total Tax Rate Calculation

  (bracket 1 income x bracket 1 tax rate) + (bracket 2 income x bracket 2 tax rate) ...
• Average Tax Rate Calculation

  total tax value / income
• Weighted Price Index Construction

  for each good: market share x total basket value

  price index number: value of basket in a specific year / value of same basket in base year x 100
• Total Revenue (TR) Calculation

  price (P) x quantity (Q)
• Average Revenue (AR) Calculation

  total revenue (TR) / quantity (Q)
• Marginal Revenue (MR) Calculation

  change in total revenue (TR) / change in quantity (Q)
• Marginal Cost (MC) Calculation

  change in total cost (TC) / change in quantity (Q)
• Average Cost (AC) Calculation

  total cost (TC) / quantity (Q)
• Welfare Loss of Positive Externality of Production Calculation

  underproduction x (MPC - MSC) x 1/2
• Welfare Loss of Positive Externality of Consumption Calculation

  underconsumption x (MSB - MPB) x 1/2
• Welfare Loss of Negative Consumption Externality Calculation

  overconsumption x (MPB - MSB) x 1/2
• Welfare Loss of Negative Production Externality Calculation

  overproduction x (MSC - MPC) x 1/2
• Consumer Surplus Calculation

  area of triangle above market price
• Producer Surplus Calculation

  area of triangle below market price
• The Value of a Currency in Terms of Another Calculation eg. dollars and euros

  $1.5 = €1

  $1 = €(1/exchange rate)
• Change in the Value of a Currency Calculation

  (final value - initial value) / initial value x 100
• Change in the Value of Currency When Given an Exchange Rate Calculation

  ((1/ initial exchange rate) - (1/ final exchange rate)) / (1/ final exchange rate) x 100
• Price of a Good in a Different Currency

  cost x exchange rate
• Total Account Balance Calculation

  current account + capital account + financial account = 0
• Real Interest Rate Calculation

  nominal interest rate - inflation rate
• Rate of Economic Growth Calculation

  (final value of real GDP - initial value of real GDP) / initial value of real GDP
• Unemployment Rate Calculation

  number of unemployed / labour force
• Nominal GDP Using the Expenditure Approach Calculation

  C + I + G + X - M
• Nominal GNI from Nominal GDP Calculation

  GDP + income from abroad - income sent abroad
• Real GDP Calculation

  (nominal GDP / GDP deflator) x 100
• Real GDP per Capita Calculation

  real GDP / population
• Price Elasticity of Supply (PES) Calculation

  percentage change in quantity / percentage change in price
• Income Elasticity of Demand (YED) Calculation

  percentage change in quantity / percentage change in income