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Cheat Sheet For AP Economics

This document contains calculations and definitions for key concepts covered in an AP Economics exam review. It includes summaries of 14 chapters that cover topics such as supply and demand, GDP, unemployment, consumption, savings, monetary policy, international trade, and exchange rates. The goal is to provide a one-page study guide that outlines the essential formulas, models, and definitions for the AP exam.

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Mingrui Qian
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273 views3 pages

Cheat Sheet For AP Economics

This document contains calculations and definitions for key concepts covered in an AP Economics exam review. It includes summaries of 14 chapters that cover topics such as supply and demand, GDP, unemployment, consumption, savings, monetary policy, international trade, and exchange rates. The goal is to provide a one-page study guide that outlines the essential formulas, models, and definitions for the AP exam.

Uploaded by

Mingrui Qian
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Mrs.

Scrivanich
AP Exam Review

Calculations Sheet for AP Economics Exam Review

Chapter 1:
 Slope: rise/run
 Equation of a line: y=mx+b

Chapter 2:
 Factors of Production – land labor capital entrepreneurial ability
 Factor income: WRIP
 Most optimal point of production on PPC: MB=MC

Chapter 3:
 Demand determinants: PINTE
 Supply determinants: PRENTT
 Shortage = QD-QS
 Surplus = QS - QD

Chapter 6:
 Gross Domestic Product (GDP):
o Expenditures Approach: C + Ig + Xn + G
o Income Approach: WRIPINDS
 Net Domestic Product (NDP):
o GDP – Depreciation
o C + In + Xn + G
 National Income (NI):
o WRIP
o NDP – (Net Foreign Factor + Indirect Bus. Tax)
 Personal Income (PI):
o NI – (C+U+S+I) + T
 DI:
o DI = C + S
o DI = PI – personal income taxes
 Corporate Profits = Dividends + Corp Prof Tax + Und Corp Profits
 Price Index = (price of mark basket in specific yr/price of same basket in base yr) x
100
 Real GDP = nominal GDP / price index (in hundredths)
 Xn = exports – imports
Mrs. Scrivanich
AP Exam Review

Chapter 7:
 Full Employment = frictional + structural unemployment
 Full Employment unemployment rate is achieved when: cyclical unemploy. = 0
 Unemployment Rate = (unemployed / labor force) x 100
 GDP gap = Cyclical unemployment x 2
 Rate of Inflation:
o ((This yr’s price index – Last yr’s price index) / Last yr’s price index) X 100
 Rule of 70 = 70 / Rate of Inflation
 % change in real income = % change in nominal income - % change in price level
 % change in price level = % change in nominal income - % change in real income

Chapter 8:
 DI = C + S
 S = DI – C
 APC = C/DI
 APS = S/DI
 MPC:
o Change in C / Change in DI
o Slope of C
o Slope of AE
 MPS:
o Change in S / Change in DI
o Slope of S
 Breakeven level of income: DI = C
 Equilibrium GDP:
o Leakages = injections
o Sa + Ig + M = Ig + G + X
o GDP = AE
o AE = C + Ig + G + Xn

Chapter 9:
 Multiplier:
o Change in real GDP / Initial change in spending
o 1 / MPS
o 1 / (1 – MPC)
 Change in GDP = change in AE x multiplier
 Sa = change in DI x MPS
Mrs. Scrivanich
AP Exam Review

 Ca = change in DI x MPC
 Balanced budget multiplier = 1
 Recessionary Gap or Inflationary Gap = GDP gap / multiplier

Chapter 11:
 Change in AD = change in AE x multiplier
 AE = C, Ig, G, Xn
 Budget Deficit = G > T
 Budget Surplus = T > G

Chapter 12:
 Sm = M1 + M2 + M3
 M1 = currency + demand deposits
 M2 = M1 + savings + small time deposits + money mkt mutual funds + money mkt
dep accts
 M3 = M2 + large time deposits (over 100,000)
 Dm = Da + Dt
 Bond Interest Rate = bond coupon / bond price

Chapter 13:
 Assets = liability + net worth
 Required reserves = demand deposits x reserve ratio
 Excess reserves = actual reserves – required reserves
 Money creating potential = excess reserves x monetary multiplier
 Monetary multiplier = 1 / reserve ratio
 Direct change in supply of money = when DD change and don’t change elsewhere

Chapter 15/17:
 Equation of exchange: MV = PQ

Chapter 35-36:
 Cost ratio
 Terms of trade
 Trading possibilities
 Gains from trade
 World supply and demand:
o Surplus = exports
o Shortage = imports

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