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IB Economics Higher Level Content (Microeconomics (Demand Functions (Qd =…

- - - - Involves the solving of macroeconomic issues; unemployment and inflation
  - - - Average tax rate
        
        Total tax paid/Income *100
      - Marginal tax rate
        
        Change in Total tax paid/ Change in Income
    - - Inflation rate = [Price Index for Year (t) - Price Index for Year (t-1)]/ Price Index for the year before (t-1) *100
        
        Price Index = [Cost of basket in the year considered/ Cost of basket in base year] *100
    - - Unemployment rate = (Number of Unemployed/Labour Force) *100
        
        Labour Force= Number of employed + number of unemployed
    - - RGDP = (nominal GDP/price deflator) X 100
        
        Nominal GDP is the value of current output measured at current prices. Real GDP measures the value of current output using base year prices.
    - - 1 /(1-mpc) = K
      - Marginal Prosperity to consume= refers to the proportion of additional income that is spent on consumer goods and services.
      - Marginal Prosperity to Save
      - Marginal Prosperity of taxation
    - - GDP = C (Consumption) + G (Government Spending) + I (Investment) +(X-M) (Exports - Imports)
      - GDP Per capita= Total GDP/ Population
      - GNI= GDP+ Net property income from abroad
      - Real GDP= Nominal GDP/ Price Deflator x 100
- - - - Qd = Quantity Demanded
      - a = the horizontal or Q-intercept
      - P = Price
      - -b = the gradient of the slope
  - - - Qs = Quantity Supplied
      - P = Price
      - c = Horizontal or Q-Intercept
      - d = the slope