GDP
* Gross Domestic Product (GDP) = C + G + I + (X-M)
* GDP Per Capita = GDP/Total Population of a country
* Real GDP = Nominal GDP * (CPI base year/CPI current year)
* Real GDP = Nominal GDP / (1 + Inflation rate)
* GDP Deflator = (GDP at Current Prices/GDP at Constant Prices)*100
* Real GDP = Nominal GDP / GDP Price Deflator
* GDP Growth Rate = {(Current Year GDP/Last Year GDP)-1}*100
* GDP Growth Rate = [(Current Year GDP - Base Year GDP) / Base Year GDP] *100
Measuring National Income
* GDP = C + G + I + (X-M) .... Expenditure Approach
* Gross Domestic Income (GDI) = R + W + I + P + Depreciation + Indirect Business Tax - income of residents from foreign source + income of foreigners in the country = National Income ....Income Approach
* GDP = Total Output Produced by firms (Three Sectors) in a country ..... Output Approach
* National Income (NI) = GDP ......... Primary Measure
* GDI = R + W + I + P + Depreciation + Indirect Business Tax ........ Other Measure
* GNI = GDP + Net Property Income from abroad (includes foreigners spending in the country) ..... Other Measure
* Net Property Income from abroad = Income from Physical and Financial assets owned by the citizen of the country abroad - Repatriation of income from Physical and Financial assets owned by the foreigners in the country
* GDI = R + W + I + P + Depreciation + Indirect Business Tax (net amount after deducting subsidies) = C + G + I + (X-M)
(Note: Please, comment if you have any updates regarding the formula in the comment box)
* GDI = GDP (Approximately)
* Gross National Income (GNI) = GDI + Net Property Income from abroad (includes foreigners spending in the country)
* GNI = R + W + I + P + Depreciation + Indirect Business Tax (net amount after deducting subsidies) + Net Property Income from abroad (includes foreigners spending in the country)
* Net Output or Value Added = Value of Total Final Goods Produced - Value of Total Intermediate Goods used in Production of the Final Goods
* Net Domestic Product = GDP - Depreciation
* Net National Income (NNI)= GNI - Depreciation
* NNI = NDP + Net Income from abroad
* National Income = GDI + Net Property Income from abroad - Depreciation - Indirect Business Taxes (Sales Tax, Excise Tax etc.)
* National Income = R + W + I + P + Depreciation + Indirect Business Tax (net amount after deducting subsidies) + Net Property Income from abroad - Depreciation - Indirect Business Taxes (Sales Tax, Excise Tax etc.)
* National Income = GDP + Net Property Income from abroad
National Income = GNI
National Income = NNI + Depreciation
* GNP = GDP + Net Property Income from abroad (does not include foreigners spending in the country)
* Personal Income = NI - (Corporate Retained Profit + Corporate Income Taxes + Social Insurance Contributions) + (Transfer Payments + Government Interest Payments)
* Personal Disposable Income = PI - Income Tax Payments
* Personal Saving (Individual) = PDI - Personal Consumption Expenditure
* Private Saving = (Sum of the Personal Saving) + Business Savings (Business Savings = Retained Profit + Depreciation)
* Private Saving = GDI - C - T (Where C = Consumption spending, T = Taxes)
* Public Saving = T - G (T = government Income from Tax, G = government expenditure)
* Investment = Private Saving + Public Saving (When net export = 0 )
Inflation
* Consumer Price Index (CPI) = (Current expenditure on a basket of goods and services/ Base period expenditure on a basket of goods and services)*100
* Inflation Rate = (Current period CPI / Base period CPI)*100
* Demand-Pull Inflation = Increase in Aggregate Demand in the Short-run
* Cost-Push Inflation = Decrease in Aggregate Supply in the Short-run
* Deflation = Decrease in AD leading to falling Price Level
Unemployment
* Workforce Participation Rate = (Labour Force / Population at Working Age) * 100
* Labour Force = Employed + Unemployed = Active Population
* Inactive Population = Population at Working Age - Labour Force
* Unemployment Rate = (Unemployed / Labour Force) * 100
* Employment Rate = ( Employed / Population at Working Age) * 100
Balance of Payments (BOP)
* BOP = Current account balance + Capital and Financial account
* Current Account Balance = Balance of Trade in Goods (Visible Balance) + Balance of Trade in Services (Invisible Trade)
* Balance of Trade in Goods (Visible Balance) = Physical Exports - Physical Imports
* Balance of Trade in Services (Invisible Trade) = (Invisible exports - Invisible imports) + (Inward Primary income - Outward Primary income) + (Inward Secondary income - Outward Secondary income)
* Capital and Financial account = (Inward Investment - Outward Investment) + (Inward Portfolio Investment - Outward Portfolio Investment)
Fiscal Policy
* Tax Revenue = Direct Tax + Indirect Tax
* Direct Tax = Income Tax + Corporate Profit Tax
* Indirect Tax = VAT + Duties
* Spending = Expenditure on Current Goods + Expenditure on Public Goods + Expenditure on Defense + Expenditure on Education + Expenditure Infrastructure + Healthcare and so on.
* Balanced Budget = Spending = Tax Revenue
* Budget Surplus (Fiscal Surplus) = Spending < Tax Revenue
* Budget Deficit (Fiscal Deficit) = Spending > Tax Revenue
* Contractionary Fiscal Policy = Spending < Tax Revenue
* Expansionary Fiscal Policy = Spending > Tax Revenue
Monetary Policy
* Real Interest Rate = Nominal Interest - Inflation Rate
* Quantity Theory of Money = MV = PY or MV = PQ
* Contractionary Monetary Policy = Setting Interest Rate at Higher Level or Decreasing Money Supply through Quantitative Easing
* Expansionary Policy = Setting Interest Rate at Lower Level or Increasing Money Supply through Quantitative Easing
Exchange Rate
* Real Exchange Rate = (nominal exchange rate * domestic price index)/ foreign exchange rate
* Terns of Trade = (export price index / import price index)*100
(Note: Please, comment if you have any updates regarding the formula in the comment box)
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Note - Formulas are taken from the following sources.
* Study.com
* Economics by Peter Smith (NNI - 194)
* Economics by Colin and Grant
* Economics by Gregory and Ruffin - GDI - 118, PI-122, PDI,PS,Ps-123,123,
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