Econ Micro Lectn

8/18/2019 Econ Micro Lectn

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Y = C + I +G + NX


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Y = C + I +G + X M

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GDP Deflator =Nominal GDP

Real GDP100

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CPI =Cost of the Basket in the Current Year

Cost of the Basket in a Base Year 100


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Inflation Rate =CPI in Current Year CPI in Previous Year

CPI in Previous Year100


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Number of Baskets Bought by Ruth in 1931 =$80,000 in 1931

Cost of Each Basket in 1931


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2007 Cost of the Baskets Bought by Ruth in 1931

= Cost of Each Basket in 2007 Number of Baskets Bought by Ruth in 1931

= Cost of Each Basket in 2007 $80,000 in 1931


2007 Cost of the Baskets Bought by Ruth in 1931

=


Cost of Each Basket in a Base Year100

Cost of Each Basket in a Base Year


1

100 $80,000 in 1931

2007 Cost of the Baskets Bought by Ruth in 1931 = CPI in 2007CPI in 1931

$80,000 in 1931

Value in this Year's Dollars = Value in a Past Year's DollarsCPI This Year

CPI in the Past Year

Value of Ruth's Salary in 2007 Dollars = $80,000 in 1931 Dollars207

15.2= $1,089,474

Value of Hoover's Salary in 2007 Dollars = $75,000 in 1931 Dollars 207

15.2= $1,021,382


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Real Interest Rate = Nominal Interest Rate Inflation Rate


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Labor Force = Number of Employed + Number of Unemployed

Unemployment Rate =Number of Unemployed

Labor Force100

Labor Force Participation Rate =Labor Force

Adult Population100


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P =dollars

basket of goods

1

P=

baskets of goods

dollars


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Econ Micro Lectn