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Cards In This Set
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GDP Expenditures Method
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CIGE (Consumption of Households, Investments by Businesses, Government Purchases, Expenditures by Foreigners)
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GDP Income Method
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WRIPS (Wages + Rents + Interests + Profits + Statistical Adjustment)
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Net Domestic Product (NDP)
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GDP - Consumption of fixed capital = NDP (depreciation)
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National Income (NI)
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NDP - Statistical Discrepancy + Net Foreign Factor Income = NI
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Personal Income (PI)
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NI - Income that is earned but not received + Income that is received but not earned = PI
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Disposable Income (DI)
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PI - Taxes = DI
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Price Index in Given Year
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[(Price Market Basket in specific Year)/Price of Same Market Basket in Base Year)] x 100
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Real GDP
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[(Nominal GDP)/(price index in hundredths)]
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Price Index (in hundredths)
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[(Nominal GDP)/(Real GDP)]
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Rule of 70
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~# of years to double Real GDP = [(70)/(annual percentage rate of growth)]
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Unemployment Rate
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[(Unemployed)/(Labor Force)] x 100
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Okun's Law
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For every 1 percentage point by which the actual unemployment rate exceeds the natural rate, a negative GDP gap of about 2% occurs
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GDP gap
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Actual GDP - Potential GDP = GDP gap
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Consumer Price Index (CPI)
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[(price of the most recent market basket in the particular year)/(price estimate of the same basket in 1982-1984)] x 100
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Rate of Inflation
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[(New CPI - Old CPI)/(Old CPI)] x 100
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