MULTIPLIER 

FORMULA :

K = change in income (y) / change in investment (I) = ▲ Y / ▲I  

K  =  1 / 1-MPC

MPC + MPS = 1

MPC = 1-MPS

MPS = 1-MPC

INCOME METHOD , PERSONAL INCOME AND PERSONAL DISPOSABLE INCOME

FORMULA :

NATIONAL INCOME AT FC 

National income (NNP fc) = Wages and salaries+Rent+Interest+Profits+Mixed income of self employed+Net Factor income from abroad

NATIONAL INCOME AT MP

National Income at MP=National Income at FC+Indirect Taxes−Subsidies

PERSONAL INCOME :

Personal Income = National income - Social security contributions - Corporate income taxes- Undistributed corporate profits+ Transfer Payments

PERSONAL DISPOSABLE INCOME

Personal disposable income (PDI) = PI -Income tax

NOMINAL AND REAL NATIONAL INCOME 

GDP DEFLATOR

Nominal National Income=∑(Quantity of Goods and Services×Current Prices)

Formula:

$\text{Real National Income} = \frac{\text{Nominal National Income}}{\text{Price Index}}$

Alternatively,

Real National Income=∑(Quantity of Goods and Services×Base Year Prices)

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Formula:

$\text{GDP Deflator}=\frac{\text{Nominal GDP}}{\text{Real GDP}}\times 100$

GDP at MP = C + I + G + (X - M)

GDP at FC = GDP at MP - Indirect Taxes + Subsidies

NDP at MP = GDP at MP - Depreciation

NDP at FC = GDP at FC - Depreciation

GNP at MP = GDP at MP + NFIA

GNP at FC = GDP at FC + NFIA

NNP at MP = GNP at MP - Depreciation

NNP at FC = GNP at FC - Depreciation

CONVERSION BASED QUESTIONS : 

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