EQUATION SHEET
1) GDP Expenditure Method: Y
= C + I + G + NX
2) GDP Income Method: Y= Compensation of Employees+ Proprietor’s Income+
Rent+ Net Interest+ Corporate Profits+ Net Indirect Taxes
3) GNP = GDP+ factor payments from abroad minus factor payments to abroad
4) NNP=GNP-Depreciation
5) Personal Income=National Income-Indirect Business Taxes-Corporate ProfitsSocial Insurance Contributions-Net Interest+ Dividends+ Government transfers to
individuals+ Personal Interest income
6) Disposable Income= Income-Tax
7) Consumption Function: C=a+ MPC*(Y-T)
8) MPC= Change in Consumption/Change in income
9) Quantity Equation: MV=PY
10) Money Multiplier: m=cr+1/cr+rr {m=Money Multiplier, cr=Currency to Deposit
Ratio; rr= Required Reserve Ratio]
11) M=m*B [M=Money Supply, m=Money Multiplier, B=Monetary Base]
12) Government Spending Multiplier: ΔY/ΔG = (1/1-MPC)
13) Tax Multiplier: ΔY/ΔT =-(MPC /1-MPC)
14) IS Curve: Y=C(Y-T)+I(r)+G
15) LM Curve: M/P=L(r, Y)
(M/P)d = (M/P)s
16) ΔM/M+ ΔV/V= ΔP/P+ ΔY/Y
17) 𝜋 =ΔM/M- ΔY/Y
18) Fisher Equation: r (real interest rate) = I (nominal interest rate)   (inflation)
19) Phillips Curve:  = e-𝛽(u-un)+𝜈
20) Private Savings=Income-Taxes-Consumption
21) Public Savings=Taxes-Government Expenditure
22) National Savings=Public Savings +Private Savings