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Tuesday, May 11

  1. page Equations edited {http://www.pcecon.com/images/MacrocheatsheetY.gif} Rule of 70: Used to determine how many yea…
    {http://www.pcecon.com/images/MacrocheatsheetY.gif}
    Rule of 70: Used to determine how many years it takes for a value to double, given a particular annual growth rate. For example, if you put $20,000 in the bank and it earns yearly interest of 7%, then it will take 10 years (70/7) for your income to double. 70/x = # years to double where x equals growth rate.
    Y = C + I + G + NX – the spending approach to calculating GDP.
    ...
    MPC + MPS = 1. Know these definitions and this property!
    Expenditures Multiplier = 1/(1 – MPC) OR 1/MPS. It tells you how much total spending an initial injection of spending in the economy will generate. For example, if the MPC = .8 and the government spends $100 million, then the total increase in spending in the economy = $100 * 5 = 500 million.
    {http://www.pcecon.com/images/MacrocheatsheetY.gif}
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    5:15 am
  2. page Equations edited ... MPC + MPS = 1. Know these definitions and this property! Expenditures Multiplier = 1/(1 – MPC…
    ...
    MPC + MPS = 1. Know these definitions and this property!
    Expenditures Multiplier = 1/(1 – MPC) OR 1/MPS. It tells you how much total spending an initial injection of spending in the economy will generate. For example, if the MPC = .8 and the government spends $100 million, then the total increase in spending in the economy = $100 * 5 = 500 million.
    {http://www.pcecon.com/images/MacrocheatsheetY.gif}
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    5:13 am
  3. page Equations edited Type Rule of 70: Used to determine how many years it takes for a value to double, given a parti…
    Type
    Rule of 70: Used to determine how many years it takes for a value to double, given a particular annual growth rate. For example, if you put $20,000
    in the contentbank and it earns yearly interest of 7%, then it will take 10 years (70/7) for your page here.income to double. 70/x = # years to double where x equals growth rate.
    Y = C + I + G + NX – the spending approach to calculating GDP.
    S = I in a closed economy (no trade) and S = I + NX in an open economy
    Calculating Nominal GDP: Multiple the number of each good produced times the price of each good: Photdog*Qhotdog + Phamburger*Qhamburger.
    Calculating Real GDP: this proceeds just as calculating nominal GDP, but instead of current prices you use base prices: Photdog(base year)*Qhotdog(current year) + Phamburger (base year)*Qhamburger (current year). Side implications: In the base year Nominal GDP = Real GDP, with inflation Nominal GDP > Real GDP.
    GDP deflator: A measure of the cost of living (substitute for the CPI). GDP deflator = (Nominal GDP/Real GDP)*100. Remember that this is an index. Side implication: In the base year the GDP Deflator = 100.
    Constructing the CPI: step 1: compute the cost of a market basket in each year (prices times quantities), step 2: choose a base year. Step 3: Calculate the CPI for the current year by: (Cost current year)/(cost in base year)*100. Side implication: in the base year the CPI = 100. With inflation, CPI increases.
    The inflation rate via the CPI: (CPI current year – CPI previous year)/CPI previous year all times 100. Note that this is just a percentage change. The inflation rate is the percentage change in the CPI from one period to the next. You could also calculate the percentage change in the GDP (implicit) price deflator from year to year to derive at an alternative measure of inflation.
    Correcting for inflation: Let’s adjust for inflation so we can, in a more meaningful way, compare the dollar values of different points in time. Convert a figure in 1990 to its current value: current value = value in 1990 * (CPI in 2000/CPI in 1995). For example, Babe Ruth earned $80,000 in 1931. Translating to current dollars means: current value = 80,000 * (107.6/8.7) = $989,000. So $80,000 back then is equivalent to $989,000 today…THIS ONE IS CRUCIAL!!!!!!
    Real interest rate = nominal interest rate – inflation rate.
    Production function: Y = AF(L,K,H,N)
    Productivity: Y/L = AF(1,K/L, H/L, N/L)
    Unemployment Rate = (Number of Unemployed/Labor Force)*100. Key, first get the labor force – all the folks who are actively seeking employment!
    Labor force participation rate: (Labor force/adult population)*100.
    Money Multiplier = 1/R where R = reserve ratio. Application: an initial injection of $1000 of new money into an economy with a reserve ratio of 10% (.1) will generate $1000*(10) = $10,000 in total money.
    Quantity equation of money: MV = PY – a moneterist’s view of what explains changes in P (they are correct, in the long run changes in P is driven by changes in M because V is stable and Y is determined outside the model). If given three of the four variables, you should be able to use this equation to find the unknown variable.
    MPC + MPS = 1. Know these definitions and this property!
    Expenditures Multiplier = 1/(1 – MPC) OR 1/MPS. It tells you how much total spending an initial injection of spending in the economy will generate. For example, if the MPC = .8 and the government spends $100 million, then the total increase in spending in the economy = $100 * 5 = 500 million.

    (view changes)
    5:08 am

Sunday, May 9

  1. page The Income Approach edited ... The Income Approach is one of three major groups of methodologies, called valuation approaches…
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    The Income Approach is one of three major groups of methodologies, called valuation approaches, used by appraisers. It is particularly common in commercial real estate appraisal and in business appraisal. The fundamental math is similar to the methods used for financial valuation, securities analysis, or bond pricing. However, there are some significant and important modifications when used in real estate or business valuation.
    While there are quite a few acceptable methods under the rubric of the income approach, most of these methods fall into three categories: direct capitalization, discounted cash flow, and gross income multiplier.
    {household-income-targeting.jpg} Income approach = add all income earned by households and firms in a year.
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    9:26 pm
  2. page The Income Approach edited ... Income approach- what we make-No matter what is produced, just enough income should be generat…
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    Income approach- what we make-No matter what is produced, just enough income should be generated to equal the value of what was produced example: consider a toaster that sells for $15 dollars labor- 6$ so.. workers made 6$ materials- 3$ the guy who sold the materials 3 $ overhead- 1$ the utilities company made 1$ 10$ 5$ profit becomes income for owner.- So by adding up income---> we can come up with the GDP
    The Income Approach is one of three major groups of methodologies, called valuation approaches, used by appraisers. It is particularly common in commercial real estate appraisal and in business appraisal. The fundamental math is similar to the methods used for financial valuation, securities analysis, or bond pricing. However, there are some significant and important modifications when used in real estate or business valuation.
    ...
    income multiplier.
    {household-income-targeting.jpg}

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    9:24 pm
  3. page -International Trade and Exchange- edited ... {MPj04028420000[1].jpg} Different types of currencies are shown here. SS.D.2.4 The student is…
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    {MPj04028420000[1].jpg} Different types of currencies are shown here.
    SS.D.2.4 The student is able to identify the need for foreign exchange rates.
    Monetary and Fiscal Policy in Open Economy

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    9:19 pm
  4. page Other Things Not Counted in GDP edited Second {garage-sale.gif} Garage sale/ yard sale is one example of second hand salesSecond hand …
    Second {garage-sale.gif} Garage sale/ yard sale is one example of second hand salesSecond hand Sales(
    Purely Financial Transactions(buying stock)
    Intermediate Sales(zippers)
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    9:15 pm
  5. file garage-sale.gif uploaded
    9:13 pm

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