1. Macro Midterm Review

2. What are the formulas for the spending multiplier 1/MPS 1/1-MPC

3. What is the equation for MPC MPC = Change in consumption/change in income

4. What is the formula for MPS MPS = Change in savings/change in income

5. What is the formula for the GDP Deflator? GDP Deflator = current year prices x quantity of current year basket/base year prices x quantity of current year basket

6. What are the formulas for Nominal and Real GDP? Nominal = quantity of goods/services x price Real = Nominal GDP/ Price index

7. What is the formula for the tax multiplier? Tax Multiplier = -MPC/MPS

8. What is the formula for the money multiplier? MM = 1/reserve ratio

9. What is the formula to compute the maximum money a bank can loan out and the entire banking system? Individual Bank = ER Banking system = ER x money multiplier

10. What is the formula for the unemployment rate? Unemployment rate = # unemployed/ Labor Force

11. What is the formula for the CPI? CPI = Base year quantities x current year prices/ base year quantities x base year prices

12. What are the determinants of GDP? C + I + G + Xn

13. What is the formula for the equation of exchange? MV = PQ