Macroeconomics Ultimate Cheat Sheet Questions and Answers Verified by Experts

Macroeconomics Ultimate Cheat Sheet
Questions and Answers Verified by Experts

What changes aggregate demand? Exports, consumption, investment, government

spending (ECIG)




What changes aggregate supply? Labor, technology, wages, production cost, inflation


FORMULAS FORMULAS




Labor Participation Rate (Unemployed + Employed)/Population




Unemployment Rate unemployed/labor force




Spending Multiplier 1/MPS




Tax Multiplier -MPC/MPS




Money Multiplier 1/reserve requirement

, Real Interest Rate nominal interest rate - inflation rate




KEY RELATIONSHIPS KEY RELATIONSHIPS




Demand Increases Equilibrium price increases




Supply increases Equilibrium price decreases




Consumer spending increases Real GDP increases




Interest rates increase investment decreases




Inflation increases real wages decrease




Aggregate demand increases price level increases