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
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
