MACRO ECONOMICS CALCULATORS

• Average Propensity to Save – The percentage of total income that is put into
savings.
• Average Propensity to Consume – The ratio of consumption to total income.
• Consumption Function – Calculates the relationship between consumption and
disposable income.
• Fisher Equation – Connects the relationship between real interest rates, nominal
interest rates, and inflation.
• GDP (expenditure and income approaches) – A measure of all goods and services
produced over a period of time.
• GDP Deflator – The difference between nominal and real GDP.
• GDP Growth Rate – The difference in GDP between two years.
• Income Elasticity of Demand – How much the demand for a good or service will
increase if income increases.
• Inflation Rate – The amount the CPI (consumer price index) is increasing.
• Labor Force Participation Rate – The percentage of people who are in the labor
force (number of employed and unemployed) out of all people in the population.
• Labor Force – The total number of people who are employed or unemployed.
• Marginal Propensity to Consume – The amount consumption will increase (or
decrease) for every increase (or decrease) in disposable income.
• Marginal Propensity to Import – The amount imports will increase (or decrease) for
every increase (or decrease) in disposable income.
• Marginal Propensity to Save – The amount savings will increase (or decrease) for
every increase (or decrease) in disposable income.
• Money Multiplier – The maximum amount of commercial bank money that can be
created in a fractional-reserve banking system.
• National Savings – Total of both public savings and private savings in an economy.
• Net Capital Outflow – Measures the flow of capital in and out of an economy.
• Net Exports – Total exports in an economy minus total imports.
• Public Savings – The excess revenue a government brings in over their expenses.
• Private Savings – The amount an economy saves. Calculated as total income less
taxes and consumption.
• Quantity Theory of Money (Money Supply, Velocity, Average Price Level, and
Volume of Transactions) – Balances the price level of goods and services with the
amount of money in circulation in an economy.
• Real Exchange Rate – An indication of what an equivalent good would cost in your
economy.
• Real GDP – A variation of GDP adjusted for price changes such as inflation and
deflation.
• Real Interest Rate – Interest rate adjusted for the inflation rate.
• Savings Function – Describes the relationship between income and consumption.
Paired with consumption function.
• Spending Multiplier (Save and Consume) – The expectation of how much activity an
investment will make.
• Tax Multiplier (Simple and Complex) – The amount that a decrease in taxes will
generate in the economy.
• Unemployment Rate – The ratio of unemployed people to total people in the
workforce.