Formula Sheet 2 - Economics

http://www.cpa-cfa.org

Price elasticity of demand =

Cross elasticity of demand =

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Income elasticity of demand =

Price elasticity of supply =

Avg total product =

Marginal product =

ATC =

AFC =

AVC =

MC =

MR =

Profit maximization =

SR profit maximization in perfect competition =

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 Formula Sheet 2 - Economics
http://www.cpa-cfa.org

Marginal revenue product = MRPf =

Marginal product = MPf =

Demand for factor of production = Df =

Resource use profit maximization =

Define utilitarian principle

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Define Symmetry principle

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Define price ceiling –

Define price floor –

What’s the effect of taxes –

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 Formula Sheet 2 - Economics
http://www.cpa-cfa.org
Define the competitive market structure
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Define opportunity cost –

Define economic rent –

Unemployment rate =

Labor force participation rate =

Employment to population ratio =

CPI =

Inflation =

Annualized inflation rate =

GDP Expenditures approach =

GDP (Income approach/resource cost) =

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 Formula Sheet 2 - Economics
http://www.cpa-cfa.org
Real GDP =

Effective tax rate =

MPC =

Govt purchasing multiplier =

Tax multiplier =

Change in money supply =

Velocity of money =

Quantity theory of money =

Define Keynesian view –

Define classical view –

Define monetarist view –

Define and describe the feds open market operations

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 Formula Sheet 2 - Economics
http://www.cpa-cfa.org

Define demand-pull inflation -

Define cost-push inflation -

Define “crowding out” effect –

Define rational expectations theory –

Define the BOP

How does monetary policy affect exchange rates and BOP?

1.

2.

How does fiscal policy affect exchange rates and BOP?

1.

2.

How does anticipated monetary policy affect the economy?

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 Formula Sheet 2 - Economics
http://www.cpa-cfa.org
•

How does anticipated monetary policy affect the economy?

•

Define the direct and indirect exchange rate quotation

% bid/ask spread =

Annualized Fwd (+) prem/(-) disc =

What is the interest rate parity equation

Hedge size =

Arbitrage profit =

What is the relative purchasing power parity equation?