Often, as economists, we are interested in measuring how expensive imports are compared to the price received for exports. The…

## Consumer Price Index (CPI) and inflation rate formula

Consumer price index formulaCalculate CPI with one goodCalculate CPI with two goodsInflation rate formulaCalculate inflation rate with one goodCalculate inflation…

## Why does aggregate supply slope upwards?

The aggregate supply curve does not slope upwards for the same reason that the supply curve slopes upwards for an…

## Net foreign investment formula

Net foreign investment (which is also referred to as net capital outflow) is the total amount of investment overseas done…

## Natural rate of unemployment

The natural rate of unemployment or Non-Accelerating Inflation Rate of Unemployment (NAIRU) is the rate of unemployment at which inflation…

## Three different ways to calculate GDP

Three methods of calculating GDP: The Expenditure Approach The Income Approach The production Approach Gross Domestic Product (GDP) measures the…

## The natural level of output

The natural level of output, depicted as the Long Run Aggregate Supply (LRAS) curve is the level of output that…

## Calculating GDP growth

GDP growth is the measurement of the percentage change in GDP from one year to another. It is a metric…

## Balance of trade formula

Balance of trade The balance of trade (B.O.T) is defined as the value of exports minus the value of imports.…

## Potential GDP formula and output gap

Potential GDP Potential GDP formula Potential GDP – Example Output gap Examples Potential GDP Potential GDP is how much a…