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# BUAD-350 Formulas

### Formulas

Question | Answer |
---|---|

Average Tax Rate (15,582) | The total amount of taxes paid divided by the taxpayer's income |

Budget Deficit (2,38) | Government outlays minus government receipts |

Budget Surplus (2,38) | Government receipts minus government outlays |

Absorption (5,178) | C + I + G |

Average Labor Productivity (1,3) | The amount of output produced per unit of labor input (per worker or per hour of work) |

Debt-GDP Ratio (15,586) | The quantity of government debt outstanding divided by GDP |

Currency-Deposit Ratio (14,535) | The ratio of the currency held by the public to the public's deposits in banks |

Expected After-Tax Real Interest Rate (4,113) | The nominal after-tax rate of return (= nominal interest rate x 1 - tax rate) minus the expected rate of inflation; equals the expected increase in the real value of an asset after payment of taxes on interest income |

Expected Real Interest Rate (2,52) | The nominal interest rate minus the expected rate of inflation; equals the expected increase in the real value of an asset |

Employment Ratio (3,87) | The fraction of the adult population that is employed |

Capital-Labor Ratio (6,215) | The amount of capital per worker = Capital Stock / Number of Workers |

GDP Deflator (2,43) | A measure of the price level, calculated as the ratio of current nominal GDP to current real GDP |

Government Saving / Budget Surplus (2,37) | Net govt income minus govt purchases; equivalently, the govt's tax receipts minus its outlays |

Financial Account Balance (5,170) | Equals the value of financial inflows (credit items) minus the value of financial outflows (debit items) |

Net Government Income (2,36) | It equals taxes paid by the private sector minus payments from the govt to the private sector (transfers and interest payments on govt debt) |

Net National Product (NNP) (2,35) | GNP - Depreciation |

Primary Government Budget Deficit (15,577) | Equal to govt purchases of goods and services plus transfers minus tax revenues |

Real Interest Rate (2,51) | Equal to the nominal interest rate minus the rate of inflation |

Real Balances (7,254) | Measured as the nominal amount of money divided by the price level |

User Cost of Capital (4,122) | Equal to the depreciation cost plus the interest cost |

Velocity (7,257) | Calculated as nominal GDP divided by the nominal money supply |

National Income (2,33) | = GDP + Net Factor Payments - Depreciation - Statistical Discrepancy |

Net Foreign Assets (2,40) | A country's foreign assets (ex: foreign stocks, bonds, and factories owned by domestic residents) minus its foreign liabilities (domestic physical and financial assets owned by foreigners) |

Marginal Product of Capital (MPK) (3,64) | The amount of output produced per unit of additional capital |

Marginal Product of Labor (MPN) (3,69) | The amount of output produced per unit of additional labor |

Net Exports (2,32) | Exports of goods and services minus imports of goods and services |

Net Investment (4,161) | Equal to gross investment minus depreciation of existing capital |

Real Wage (3,70) | Equal to the nominal (dollar) wage divided by the price level |

Participation Rate (3,88) | The fraction of adults who are in the labor force |

Private Saving (2,37) | Equal to private disposable income minus consumption |

Private Disposable Income (2,35) | The income of the private sector (households and businesses taken together) after payment of taxes and receipt of transfer payments and interest from the govt |

Unemployment Rate (3,87) | The fraction of the labor force that is unemployed |

Unanticipated Inflation (12,444) | The actual rate of inflation minus the rate of inflation that was expected to occur |

Wealth / Net Worth (2,36) | The assets minus the liabilities of an individual, firm, or country |

Reserve-Deposit Ratio (14,527) | The ratio of reserves held by the bank to the public's deposits in banks |

Trade Deficit (1,7) | A nation's excess of imports over exports |

Trade Surplus (1,7) | A nation's excess of exports over imports |

Tax-Adjusted User Cost of Capital (4,125) | The (unadjusted) user cost of capital divided by 1 minus the effective tax rate |