Equations

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Equations Price Indexes

x 100 1. GDP Deflator = Nominal Real 2. Consumer Price Index (CPI) CPI = Current Year Basket Price x 100 Base Year Basket Price 3. Producer Price Index (PPI)

Real GDP = _Nominal_ Price Index Inflation Rate PI=Personal Income Inflation Rate= (PI 2nd year)-(PI 1st year) x 100 PI 1st year Depreciation = GDP – NDP National Domestic Product (NDP) = GDP – Depreciation Personal Income Tax = Personal Income (PI) – Disposable Income Unemployment Rate = # Unemployedx 100 Labor Force Labor Force Participation Rate = _ Labor Force x _100 Adult Population Today’s $ = Salary in year T x Price Level Today Price Level Year T Price Level = CPI

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