ECS 1601
Formula sheet
1. 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝑖𝑛𝑐𝑜𝑚𝑒 𝑝𝑎𝑖𝑑 𝑡𝑜 𝑡𝑎𝑥 = 𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑡𝑎𝑥 𝑝𝑎𝑖𝑑 ÷ 𝐼𝑛𝑐𝑜𝑚𝑒 × 100
2. GDP = C+I+G +(X-Z)
3. GDE = C+I+G
4. 𝑇𝑒𝑟𝑚𝑠 𝑜𝑓 𝑡𝑟𝑎𝑑𝑒 = 𝐸𝑥𝑝𝑜𝑟𝑡 𝑝𝑟𝑖𝑐𝑒 𝑖𝑛𝑑𝑒𝑥 ÷ 𝐼𝑚𝑝𝑜𝑟𝑡 𝑝𝑟𝑖𝑐𝑒 𝑖𝑛𝑑𝑒𝑥 × 100
5. Value of sales = Total primary income + Value of intermediate goods & service
6. Net domestic product = Gross domestic – Depreciation
7. GDP @basic price = GDP@ market prices +Taxes on products - Subsidies on products
8. GDP @basic price = Gross value added @factor cost +Taxes on production - Subsidies on
production
9. GDP = GNI – primary income receipts from the rest of the world + primary income payments to
foreigners
10. GDE = Final consumption exp. by household +gross capital formation +final consumption exp.
by govern + residual item
11. GDP@ market price using exp. Approach = Final consumption exp. by household +gross capital
formation +final consumption exp. by govern + exports +residual item – imports
12. final consumption expenditure by households GDP = 𝐹𝑖𝑛𝑎𝑙 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑒𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒 𝑏𝑦
ℎ𝑜𝑢𝑠𝑒ℎ𝑜𝑙𝑑𝑠 ÷𝐺𝐷𝑃 @ 𝑚𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒𝑠 ×100
13. gross capital formation or investment GDP = 𝐺𝑟𝑜𝑠𝑠 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 𝑓𝑜𝑟𝑚𝑎𝑡𝑖𝑜𝑛 𝑜𝑟 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡÷𝐺𝐷𝑃 @
𝑚𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒𝑠×100
14. final consumption expenditure by government GDP = 𝐹𝑖𝑛𝑎𝑙 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑒𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒 𝑏𝑦
𝑔𝑜𝑣𝑒𝑟𝑛𝑚𝑒𝑛𝑡÷𝐺𝐷𝑃 @ 𝑚𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒𝑠×100
15. exports of goods and services GDP = 𝐸𝑥𝑝𝑜𝑟𝑡𝑠 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑎𝑛𝑑 𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠 ÷𝐺𝐷𝑃 @ 𝑚𝑎𝑟𝑘𝑒𝑡
𝑝𝑟𝑖𝑐𝑒𝑠×100
16. imports of goods and services GDP = Im𝑝𝑜𝑟𝑡𝑠 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑎𝑛𝑑 𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠 ÷𝐺𝐷𝑃 @ 𝑚𝑎𝑟𝑘𝑒𝑡
𝑝𝑟𝑖𝑐𝑒𝑠×100
17. GNI = GDP@ market prices + Primary income from the rest of the world - Primary income to the
rest of the world
18. 𝑈𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑚𝑒𝑛𝑡 𝑟𝑎𝑡𝑒 (Strict definition) =Number of unemployed persons ÷Total labour
force×100
19. 𝑈𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑚𝑒𝑛𝑡 𝑟𝑎𝑡𝑒 (expanded definition) =Number of unemployed persons + discouraged
work seekers ÷Total labour force +discouraged work seekers ×100
20. The inflation rates = 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝐶𝑃𝐼 𝑓𝑟𝑜𝑚 2013 𝑡𝑜 2014 = 𝐶𝑃𝐼 2014 ÷𝐶𝑃𝐼 2013−1×100
21. consumption function 𝐶=Y-S
22. marginal propensity to consume 𝑐=Δ𝐶 ÷Δ𝑌
23. consumption function 𝐶= 𝐶̅+𝑐Y
24. savings function 𝑆=𝑆+𝑠𝑌
25. multiplier ∝= 1
(1−𝑐)
26. multiplier ∝= 1
1−𝑐(1-t)
27. multiplier ∝= 1
1−𝑐(1-t) +m
28. autonomous expenditure 𝐴̅=𝐶̅+𝐼̅+𝐺̅
29. equilibrium income level 𝑌𝑒= ∝ × 𝐶 or 𝑌𝑒= ∝ × Ā
30. induced imports @equilibrium level of income = mY
31. Fiscal surplus or deficit = Taxes (T) – Government spending (G)
32. Nominal GDP = Income increases% = current year – previous year
Previous year
33. Increase in real income = (Income increase % - inflation increase%) x previous year
34. Real GDP = (Nominal GDP% -Inflation Rate%) x previous year
35. Induce consumption 𝐶 = cY
36. Consumption spending = consumption + Induce consumption = Cs= C+ 𝐶
37. savings 𝑆=1-c𝑌
Formula sheet
1. 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝑖𝑛𝑐𝑜𝑚𝑒 𝑝𝑎𝑖𝑑 𝑡𝑜 𝑡𝑎𝑥 = 𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑡𝑎𝑥 𝑝𝑎𝑖𝑑 ÷ 𝐼𝑛𝑐𝑜𝑚𝑒 × 100
2. GDP = C+I+G +(X-Z)
3. GDE = C+I+G
4. 𝑇𝑒𝑟𝑚𝑠 𝑜𝑓 𝑡𝑟𝑎𝑑𝑒 = 𝐸𝑥𝑝𝑜𝑟𝑡 𝑝𝑟𝑖𝑐𝑒 𝑖𝑛𝑑𝑒𝑥 ÷ 𝐼𝑚𝑝𝑜𝑟𝑡 𝑝𝑟𝑖𝑐𝑒 𝑖𝑛𝑑𝑒𝑥 × 100
5. Value of sales = Total primary income + Value of intermediate goods & service
6. Net domestic product = Gross domestic – Depreciation
7. GDP @basic price = GDP@ market prices +Taxes on products - Subsidies on products
8. GDP @basic price = Gross value added @factor cost +Taxes on production - Subsidies on
production
9. GDP = GNI – primary income receipts from the rest of the world + primary income payments to
foreigners
10. GDE = Final consumption exp. by household +gross capital formation +final consumption exp.
by govern + residual item
11. GDP@ market price using exp. Approach = Final consumption exp. by household +gross capital
formation +final consumption exp. by govern + exports +residual item – imports
12. final consumption expenditure by households GDP = 𝐹𝑖𝑛𝑎𝑙 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑒𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒 𝑏𝑦
ℎ𝑜𝑢𝑠𝑒ℎ𝑜𝑙𝑑𝑠 ÷𝐺𝐷𝑃 @ 𝑚𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒𝑠 ×100
13. gross capital formation or investment GDP = 𝐺𝑟𝑜𝑠𝑠 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 𝑓𝑜𝑟𝑚𝑎𝑡𝑖𝑜𝑛 𝑜𝑟 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡÷𝐺𝐷𝑃 @
𝑚𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒𝑠×100
14. final consumption expenditure by government GDP = 𝐹𝑖𝑛𝑎𝑙 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑒𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒 𝑏𝑦
𝑔𝑜𝑣𝑒𝑟𝑛𝑚𝑒𝑛𝑡÷𝐺𝐷𝑃 @ 𝑚𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒𝑠×100
15. exports of goods and services GDP = 𝐸𝑥𝑝𝑜𝑟𝑡𝑠 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑎𝑛𝑑 𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠 ÷𝐺𝐷𝑃 @ 𝑚𝑎𝑟𝑘𝑒𝑡
𝑝𝑟𝑖𝑐𝑒𝑠×100
16. imports of goods and services GDP = Im𝑝𝑜𝑟𝑡𝑠 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑎𝑛𝑑 𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠 ÷𝐺𝐷𝑃 @ 𝑚𝑎𝑟𝑘𝑒𝑡
𝑝𝑟𝑖𝑐𝑒𝑠×100
17. GNI = GDP@ market prices + Primary income from the rest of the world - Primary income to the
rest of the world
18. 𝑈𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑚𝑒𝑛𝑡 𝑟𝑎𝑡𝑒 (Strict definition) =Number of unemployed persons ÷Total labour
force×100
19. 𝑈𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑚𝑒𝑛𝑡 𝑟𝑎𝑡𝑒 (expanded definition) =Number of unemployed persons + discouraged
work seekers ÷Total labour force +discouraged work seekers ×100
20. The inflation rates = 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝐶𝑃𝐼 𝑓𝑟𝑜𝑚 2013 𝑡𝑜 2014 = 𝐶𝑃𝐼 2014 ÷𝐶𝑃𝐼 2013−1×100
21. consumption function 𝐶=Y-S
22. marginal propensity to consume 𝑐=Δ𝐶 ÷Δ𝑌
23. consumption function 𝐶= 𝐶̅+𝑐Y
24. savings function 𝑆=𝑆+𝑠𝑌
25. multiplier ∝= 1
(1−𝑐)
26. multiplier ∝= 1
1−𝑐(1-t)
27. multiplier ∝= 1
1−𝑐(1-t) +m
28. autonomous expenditure 𝐴̅=𝐶̅+𝐼̅+𝐺̅
29. equilibrium income level 𝑌𝑒= ∝ × 𝐶 or 𝑌𝑒= ∝ × Ā
30. induced imports @equilibrium level of income = mY
31. Fiscal surplus or deficit = Taxes (T) – Government spending (G)
32. Nominal GDP = Income increases% = current year – previous year
Previous year
33. Increase in real income = (Income increase % - inflation increase%) x previous year
34. Real GDP = (Nominal GDP% -Inflation Rate%) x previous year
35. Induce consumption 𝐶 = cY
36. Consumption spending = consumption + Induce consumption = Cs= C+ 𝐶
37. savings 𝑆=1-c𝑌
