AP Macroeconomics Formulas and Definitions:Key Formulas

Expenditure Approach to Real GDP

Real GDP = consumption + investment + government spending + net exports
GDP r = C + Ig + G + Nx
Income Approach to Real GDP
Real GDP = Rent + Wages + Interest + ProfitsGDPr = r + w + I + p
Labor Force
LF = # Employed + # Unemployed LF = E + U
Labor Force Participation Rate
Labor Force LFLabor force participation rate = Working Age Population LFPR = pop
Unemployment Rate
# Unemployed UUR = Labor Force UR = LF
Inflation Rate (CPI is Consumer Price Index)
(New CPI Old CPI)Infl. R = Old CPI X 100
Converting Nominal GDP to Real GDP (GDP Deflator)
(Nominal GDP)GDP Deflator = Real GDP X 100