Symbols and Formulas
Weight:
8
Course Number:
Symbols and Abbreviations
π | Profit |
Δ | Change |
a | Autonomous Consumption |
AD | Aggregate Demand |
AE | Aggregate Expenditures |
APC | Average Propensity to Consume |
APS | Average Propensity to Save |
AS | Aggregate Supply |
b | see MPC |
bYd | Income-Induced Consumption |
C | Consumption |
cp | Ceteris Paribus (“All other things being equal”) |
CPI | Consumer Price Index |
ER | Excess Reserves |
G | Government Spending |
GDP | Gross Domestic Product |
GNP | Gross National Product |
I | Investment |
K | Capital |
k | Keynesian Multiplier |
LF | Labor Force |
LFPR | Labor Force Participation Rate |
LRAS | Long Run Aggregate Supply |
M | Imports |
MB | Marginal Benefit |
MC | Marginal Cost |
mm | Money Multiplier |
mpc | Marginal Propensity to Consume (sometimes abbreviated b) |
mpe | Marginal Propensity to Expend |
mps | Marginal Propensity to Save |
MS | Money Supply |
N | Employment/Labor |
p | Price |
P | Price Level |
q | Quantity |
r | Interest rate |
RR | Required Reserves |
rrr | Required Reserve Ratio |
S | Savings |
SRAS | Short Run Aggregate Supply |
T | Taxes |
X | Exports |
Y | Real Output/Income |
Yd | Disposable Income |
Formulas/Identities/Laws
AD = | (a + bYd) + I + G + (X-M) |
APC = | C/Yd |
APS = | S/Yd |
| By definition, APC + APS = 1 |
C = | a + bYd |
GDP = | AD = Y = C + I + G + (X-M) |
Inflation rate = | (new price index – old prince index)/old price index |
k = | 1/mps = 1/(1-mpc) |
Law of Demand | As price increases, quantity demanded decreases, cp |
Law of Supply | As price increases, quantity supplied increases, cp |
LFPR= | (LF/non-institutionalized population) * 100 |
mm = | 1/rrr |
MPC = | ΔC/ΔYd |
MPS = | ΔS/ΔYd |
| By definition, MPC + MPS = 1 |
Per capita GDP= | GDP/population |
Real GDP = | (nominal GDP /deflator) * 100 |
Yd = | Personal Y – Personal taxes |
Yield on a bond = | annual interest payment/ price paid |
unN Rate= | (unN/LF) * 100 |
