Introduction to CFA Level I Formula Sheet Equations and Latex CodeQUANTITATIVE ECONOMICS and FINANCIAL REPORTING
rockingdingo 20240130 #CFA #CFA I #AI CoursesIntroduction to CFA Level I Formula Sheet Equations and Latex CodeQUANTITATIVE ECONOMICS and FINANCIAL REPORTING
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In this blog, we will summarize the latex code for equations of CFA Level I exam, Formula Sheet Equations and Latex Code, and provide Chatbot as AI Assistant to facilitate your reading. You can ask question like what is "Real GDP" in the chatbox. Topics in the blog include three major parts of CFA Level I exam: QUANTITATIVE, ECONOMICS and FINANCIAL REPORTING. Detailed topics include THE TIME VALUE OF MONEY, Future Value, Present Value, Effective Annual Rate, Continuous Compounding, Ordinary Annuity, Annuity Due, Perpetuity, STATISTICAL CONCEPT AND MARKET RETURNS, Fisher Skewness, Kurtosis, Twoasset portfolio, Threeasset portfolio, Microeconomics, Simple Interest, Effective Rate, Future Value of Ordinary Annuities, Annuities Due, Present Value of Ordinary Annuities, Allocative Efficiency Condition, Average Fixed Cost; Macroeconomics Investment, Aggregate Expenditure Without Government or Foreign Sectors, Marginal Propensity to Consume MPC, Marginal Propensity Save MPS, Sum of Marginal Propensity to Save and Marginal Propensity to Consume, Autonomous Spending Multiplier, Balanced Budget Multiplier, Banks Reserve Ratio, Nominal Interest Rate, Real GDP, Real Interest Rate, Tax Multiplier, Unemployment Rate. FINANCIAL REPORTING and ANALYSIS, Basic EPS, Diluted EPS, Balance Sheet, Free Cash Flow to the Firm, Cash Flow Performance Ratio, Cash Flow To Revenue Ratio, Cash Return On Assets, Cash Return On Assets, Cash Return On Equity, Activity Ratio, Inventory Turnover, Days of Inventory On Hand (DOH), Receivables Turnover, Days of Sales Outstanding, etc. Tag: CFA,CFA I,AI Courses
 1. QUANTITATIVE METHODS
 THE TIME VALUE OF MONEY
 Future Value
 Present Value
 Effective Annual Rate
 Continuous Compounding
 Ordinary Annuity
 Annuity Due
 Perpetuity
 STATISTICAL CONCEPT AND MARKET RETURNS
 Mean and Variance
 Standard Deviation
 Probability Distributions
 Binomial Distribution
 Poisson Distribution
 Normal Gaussian Distribution
 ChiSquare Test
 Advanced Statistics
 Sum of Random Variables
 Covariance
 Gamma Distribution
 Fisher Skewness
 Kurtosis
 Twoasset portfolio
 Threeasset portfolio
 2. ECONOMICS
 Microeconomics
 Simple Interest
 Effective Rate
 Future Value of Ordinary Annuities
 Annuities Due
 Present Value of Ordinary Annuities
 Allocative Efficiency Condition
 Average Fixed Cost
 Average Product
 Average Profit
 Average Revenue
 Average Total Cost
 Average Variable Cost
 CrossPrice Elasticity of Demand
 Distributive Efficiency Condition
 Elasticity of Supply
 Factor of Production Hiring Rule
 Marginal Revenue Product
 Gini Coefficient
 Marginal Cost
 Marginal Product of Labor
 Marginal Revenue
 Marginal Factor Cost MFC
 Marginal Revenue Product of Labor MRPL
 Optimal Combination of Resources Condition
 Optimal Consumption Rule
 Price Elasticity of Demand
 Price for a Competitive Firm
 Production Efficiency Condition
 Profit
 ProfitMaximizing Output Level
 Slope of the Total Product Curve
 Socially Optimal Level of Output
 Total Costs
 Macroeconomics
 Investment
 Aggregate Expenditure Without Government or Foreign Sectors
 Marginal Propensity to Consume MPC
 Marginal Propensity Save MPS
 Sum of Marginal Propensity to Save and Marginal Propensity to Consume
 Autonomous Spending Multiplier
 Balanced Budget Multiplier
 Banks Reserve Ratio
 Budget Deficit
 Financial Account Balance
 Consumer Price Index CPI
 Consumption Function
 CurrentAccount Balance
 Equality of Leakages and Injections
 Equation of Exchange
 Gross Domestic Product GDP
 Gross Domestic Product Deflator
 Inflation Between Two Years
 Merchandise Trade Balance
 Nominal Interest Rate
 Real GDP
 Real Interest Rate
 Tax Multiplier
 Unemployment Rate
 3. FINANCIAL REPORTING & ANALYSIS
 Basic EPS
 Diluted EPS
 Balance Sheet
 Free Cash Flow to the Firm
 Cash Flow Performance Ratio
 Cash Flow To Revenue Ratio
 Cash Return On Assets
 Cash Return On Assets
 Cash Return On Equity
 Cash To Income
 Cash flow Per Share
 Debt Coverage Ratio
 Interest coverage ratio
 Reinvestment Coverage Ratio
 Debt Payment Coverage Ratio
 Activity Ratio
 Inventory Turnover
 Days of Inventory On Hand (DOH)
 Receivables Turnover
 Days of Sales Outstanding
THE TIME VALUE OF MONEY

Future Value
Future ValueEquation
$$FV=PV(1+r)^n$$
Latex Code
FV=PV(1+r)^n
Explanation
Latex code for Future Value Equation
 $$FV$$: Future Value of Money
 $$PV$$: Present Value of Money
 $$r$$: Interest rate per period
 $$n$$: Period
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Present Value
Present ValueEquation
$$PV=\frac{FV}{(1+r)^n}$$
Latex Code
PV=\frac{FV}{(1+r)^n}
Explanation
Latex code for Present Value of Money Equation
 $$FV$$: Future Value of Money
 $$PV$$: Present Value of Money
 $$r$$: Interest rate per period
 $$n$$: Period
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Effective Annual Rate
Effective Annual RateEquation
$$\text{EAR}=(1+\frac{r}{m})^{m}1$$
Latex Code
\text{EAR}=(1+\frac{r}{m})^{m}1
Explanation
Latex code for Effective Annual Rate
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Continuous Compounding
Continuous CompoundingEquation
$$FV=PV \times e^{r_{c} \times n}$$
$$PV=FV \times e^{r_{c} \times n}$$
Latex Code
FV=PV \times e^{r_{c} \times n} \\ PV=FV \times e^{r_{c} \times n}
Explanation
Latex code for Continuous Compounding
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Ordinary Annuity
Ordinary AnnuityEquation
$$FV=\frac{A}{r}[(1+r)^{n}1]$$
$$PV=\frac{A}{r}[1\frac{1}{(1+r)^{n}}]$$
Latex Code
FV=\frac{A}{r}[(1+r)^{n}1] \\ PV=\frac{A}{r}[1\frac{1}{(1+r)^{n}}]
Explanation
Latex code for Ordinary Annuity
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Annuity Due
Annuity DueEquation
$$FV=\frac{A}{r}[(1+r)^{n}1](1+r)$$
$$PV=\frac{A}{r}[1\frac{1}{(1+r)^{n}}](1+r)$$
Latex Code
FV=\frac{A}{r}[(1+r)^{n}1](1+r) \\ PV=\frac{A}{r}[1\frac{1}{(1+r)^{n}}](1+r)
Explanation
Latex code for Annuity Due
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Perpetuity
PerpetuityEquation
$$PV=\frac{A}{r}$$
$$PV=\frac{A}{r}(1+r)$$
Latex Code
PV=\frac{A}{r} \\ PV=\frac{A}{r}(1+r)
Explanation
Latex code for Annuity Due
 $$PV=\frac{A}{r}$$: First cash flow occurs one period from now
 $$PV=\frac{A}{r}(1+r)$$: First cash flow occurs immediately
 $$A$$: Annuity amount per year
 $$r$$: Interest Rate
 $$FV$$: Future Value
 $$PV$$: Present Value
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Mean and Variance
Equation
$$\text{Mean Discrete}\ \mu=E(X)=\sum P_{i}x_{i}$$
$$\text{Mean Continuous}\ \mu=\int xf(x) dx$$
$$\text{Variance Discrete}\ \sigma^{2}=V(X)=E[(X\mu)^2]=\sum P_{i}(x_{i} \mu)^2$$
$$\text{Variance Continuous}\ \sigma^{2}=V(X)=E[(X\mu)^2]=\int (x\mu)^{2}f(x) dx$$
Latex Code
\text{Mean Discrete}\ \mu=E(X)=\sum P_{i}x_{i} \\\text{Mean Continuous}\ \mu=\int xf(x) dx \\\text{Variance Discrete}\ \sigma^{2}=V(X)=E[(X\mu)^2]=\sum P_{i}(x_{i} \mu)^2 \\\text{Variance Continuous}\ \sigma^{2}=V(X)=E[(X\mu)^2]=\int (x\mu)^{2}f(x) dx
Explanation
X denotes a random variable which has a distribution f(x) over some subset x of the real numbers. If the distribution f(x) is discrete, the probability of f(x=X)=xi is is Pi. And the mean \mu equals to the sum of probability Pi multiplies the random variable value x. . When the distribution is continuous f(x), the probability that X lies in the interval, and the f(x) denotes density function. The variance(squared value of standard deviation \sigma) measure how far the subset X is from the mean value \mu, is it a flat distribution or shallow distribution. And the definition of variance is the expectation E(X) of the squared distance between each data point X and its mean \mu.

Standard Deviation
Equation
$$\sigma=\sqrt{V(X)}=\sqrt{\sum_{i} P_{i}(x_{i}  \mu)^2}=\sqrt{\frac{\sum_{i} (x_{i}  \mu)^2}{n}}$$
$$\sigma=\sqrt{V(X)}=\sqrt{\int (x\mu)^{2}f(x) dx}$$
Latex Code
\sigma=\sqrt{V(X)}=\sqrt{\sum_{i} P_{i}(x_{i}  \mu)^2}=\sqrt{\frac{\sum_{i} (x_{i}  \mu)^2}{n}} \\ \sigma=\sqrt{V(X)}=\sqrt{\int (x\mu)^{2}f(x) dx}
Explanation
Standard Deviation \sigma equals to the squared root of Variance \sigma^{2} of a dataset X.

Binomial Distribution
Equation
$$X \sim B(n,p)$$
$$f(x)=\begin{pmatrix}n\\ x\end{pmatrix}p^{x}q^{nx}=C^{k}_{n}p^{x}q^{nx},q=1p$$
$$\text{Binominal Mean}\ \mu=np$$
$$\text{Binominal Variance}\ \sigma^2=npq$$
Latex Code
X \sim B(n,p) \\f(x)=\begin{pmatrix}n\\ x\end{pmatrix}p^{x}q^{nx}=C^{k}_{n}p^{x}q^{nx},q=1p\\\text{Binominal Mean}\ \mu=np\\\text{Binominal Variance}\ \sigma^2=npq
Explanation
The binomial distribution measures in total n independent trials, the probability that x trials in total n trials are positive (like the getting positive of flipping a coin). In this formulation, f(x) denotes the probability that x positive trials are observed in n independent trials. p denote the probability that positive is observed in each single trial. q denotes the negative is observed, which equals to 1p.

Poisson Distribution
Equation
$$X \sim \pi(\mu)$$
$$f(x)=\frac{\mu^{x}}{x!}e^{\mu}$$
$$\text{Poisson Mean } \mu$$
$$\text{Poisson Variance }\sigma^2=\mu$$
Latex Code
X \sim \pi(\mu) \\f(x)=\frac{\mu^{x}}{x!}e^{\mu}\\ \text{Poisson Mean} \mu \\ \text{Poisson Variance}\sigma^2=\mu
Explanation
\mu equals to the probability that an event occurs in a unit time period.

Normal Gaussian Distribution
Equation
$$X \sim \mathcal{N}(\mu,\sigma^2)$$
$$f(x)=\frac{1}{\sigma\sqrt{2\pi}}\exp{[\frac{(x\mu)^{2}}{2\sigma^{2}}]}$$
Latex Code
X \sim \mathcal{N}(\mu,\sigma^2) \\ f(x)=\frac{1}{\sigma\sqrt{2\pi}}\exp{[\frac{(x\mu)^{2}}{2\sigma^{2}}]}
Explanation
X denotes the random variable which follows the normal distribution. \mu denotes the mean value and \sigma denotes the standard deviation.

ChiSquare Test
Equation
$$\chi ^{2}=\sum \frac{(AE)^2}{E}$$
$$=\sum^{K}_{1}\frac{(A_{i}E_{i})^2}{E_{i}}=\sum^{K}_{1}\frac{(A_{i}np_{i})^2}{np_{i}}$$
Latex Code
\chi ^{2}=\sum \frac{(AE)^2}{E}\\=\sum^{K}_{1}\frac{(A_{i}E_{i})^2}{E_{i}}=\sum^{K}_{1}\frac{(A_{i}np_{i})^2}{np_{i}}
Explanation
ChiSquare Test measure how close and an actual observation of distribution A are correlated to the assumed theoretical distribution E. The dataset X are splitted into K different buckets and the statistics of ChiSquare Test is calculated as above.

Sum of Random Variables
Equation
$$W=aX+bY$$
$$E(W)=aE(X)+bE(Y)$$
$$\text{Var}(W)=a^{2}\text{Var}(X) + b^{2}\text{Var}(Y), \text{X and Y independent}$$
Latex Code
W=aX+bY \\ E(W)=aE(X)+bE(Y) \\ \text{Var}(W)=a^{2}\text{Var}(X) + b^{2}\text{Var}(Y), \text{X and Y independent}
Explanation
E(X) and E(Y) denote the mean of random variable X and Y, Var(X) and Var(Y) denote the variance of random variable X and Y. W is the weighted sum of two random variables.

Covariance
Equation
$$\text{Cov}(X,Y)=E[(XE(X))(YE(Y))]$$
$$=E(XY)2E(X)E(Y)+E(X)E(Y)$$
$$=E(XY)E(X)E(Y)$$
Latex Code
\text{Cov}(X,Y)=E[(XE(X))(YE(Y))]\\=E(XY)2E(X)E(Y)+E(X)E(Y)\\=E(XY)E(X)E(Y)
Explanation
Covariance measures the total variation of two random variables X and Y from their expected values E(X) and E(Y). The definition of covariance is E[(XE(X))(YE(Y))].

Gamma Distribution
Math,StatisticsEquation
$$\Gamma \left( a \right) = \int\limits_0^\infty {s^{a  1} } e^{  s} ds$$
$$P(x) = \frac{x^{\alpha1} e^{frac{x}{\theta}}}{\Gamma(\alpha) \theta^{\alpha}}$$
$$\mu = \alpha \theta$$
$$\sigma^{2} = \alpha \theta^{2}$$
$$\gamma_{1} = \frac{2}{\sqrt{\alpha}}$$
$$\gamma_{2} = \frac{6}{\alpha}$$
Latex Code
\Gamma \left( a \right) = \int\limits_0^\infty {s^{a  1} } e^{  s} ds \\ P(x) = \frac{x^{\alpha1} e^{frac{x}{\theta}}}{\Gamma(\alpha) \theta^{\alpha}} \\ \mu = \alpha \theta \\ \sigma^{2} = \alpha \theta^{2} \\ \gamma_{1} = \frac{2}{\sqrt{\alpha}} \\ \gamma_{2} = \frac{6}{\alpha}
Explanation
Latex code for Gamma Distribution. A gamma distribution is a general type of statistical distribution that is related to the beta distribution and arises naturally in processes for which the waiting times between Poisson distributed events are relevant. Gamma distributions have two free parameters, labeled alpha and theta. We now let W denote the waiting time until the ath event occurs and find the distribution of W. We could represent the situation as follows:
 $$\Gamma(a)$$ : Gamma function of a
 $$\alpha$$: Gamma function parameter
 $$P(x) = \frac{x^{\alpha1} e^{frac{x}{\theta}}}{\Gamma(\alpha) \theta^{\alpha}}$$: PDF of gamma distributed random variable X.
 $$\mu = \alpha \theta$$: Mean of Gamma Distribution
 $$\sigma^{2} = \alpha \theta^{2}$$: Variance of Gamma Distribution
 $$\gamma_{1} = \frac{2}{\sqrt{\alpha}}$$: Skewness of Gamma Distribution
 $$\gamma_{2} = \frac{6}{\alpha}$$: Kurtosis of Gamma Distribution
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Fisher Skewness
Math,StatisticsEquation
Skewness measures $$ g_{1} = \frac{\sum_{i=1}^{n}{(x_{i}  \bar{x})^{3}}/n} {s^{3}}$$ The adjusted FisherPearson skewness coefficient is: $$G_{1} = \frac{\sqrt{n(n1)}}{n2} \frac{\sum_{i=1}^{n}{(x_{i}  \bar{x})}/n} {s^{3}}$$
Latex Code
g_{1} = \frac{\sum_{i=1}^{n}{(x_{i}  \bar{x})^{3}}/n} {s^{3}} \\ G_{1} = \frac{\sqrt{n(n1)}}{n2} \frac{\sum_{i=1}^{n}{(x_{i}  \bar{x})}/n} {s^{3}}
Explanation
Latex code for Fisher Skewness. Skewness measures the lack of symmetry in a variable. The formula for the FisherPearson skewness coefficient is: The formula for the FisherPearson skewness coefficient is:
 FisherPearson skewness coefficient: $$g_{1} = \frac{\sum_{i=1}^{n}{(x_{i}  \bar{x})^{3}}/n} {s^{3}}$$
 Adjusted FisherPearson skewness coefficient: $$G_{1} = \frac{\sqrt{n(n1)}}{n2} \frac{\sum_{i=1}^{n}{(x_{i}  \bar{x})}/n} {s^{3}}$$
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Kurtosis
Math,StatisticsEquation
$$\mbox{kurtosis} = \frac{\sum_{i=1}^{N}(Y_{i}  \bar{Y})^{4}/N} {s^{4}}$$Latex Code
\mbox{kurtosis} = \frac{\sum_{i=1}^{N}(Y_{i}  \bar{Y})^{4}/N} {s^{4}}
Explanation
For univariate data Y1, Y2, ..., YN, the formula for kurtosis is as below, Note that in computing the kurtosis, the standard deviation is computed using N in the denominator rather than N  1.
 $$\bar{Y}$$: Mean
 $$s$$: Standard deviation
 $$N$$: Number of data points
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Twoasset portfolio
Math,StatisticsEquation
$$E(R_{p})=w_{1}E(R_{1}) + w_{2} E(R_{2})$$
$$\sigma^{2}(R_{p})=w^{2}_{1}\sigma^{2}(R_{1})+w^{2}_{2}\sigma^{2}(R_{2}) + 2w_{1}w_{2}Cov(R_{1},R_{2})$$
Latex Code
E(R_{p})=w_{1}E(R_{1}) + w_{2} E(R_{2}) \\ \sigma^{2}(R_{p})=w^{2}_{1}\sigma^{2}(R_{1})+w^{2}_{2}\sigma^{2}(R_{2}) + 2w_{1}w_{2}Cov(R_{1},R_{2})
Explanation
Explanation for Twoasset portfolio:
 $$E(R_{p})$$: Portfolio return
 $$\sigma^{2}(R_{p})$$: Portfolio variance
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Threeasset portfolio
Math,StatisticsEquation
$$E(R_{p})=w_{1}E(R_{1}) + w_{2} E(R_{2}) +w_{3} E(R_{3}) $$
$$\sigma^{2}(R_{p})=w^{2}_{1}\sigma^{2}(R_{1})+w^{2}_{2}\sigma^{2}(R_{2}) + w^{2}_{3}\sigma^{2}(R_{3}) + 2w_{1}w_{2}Cov(R_{1},R_{2}) + 2w_{1}w_{3}Cov(R_{1},R_{3}) + 2w_{2}w_{3}Cov(R_{2},R_{3})$$Latex Code
E(R_{p})=w_{1}E(R_{1}) + w_{2} E(R_{2}) +w_{3} E(R_{3}) \\ \sigma^{2}(R_{p})=w^{2}_{1}\sigma^{2}(R_{1})+w^{2}_{2}\sigma^{2}(R_{2}) + w^{2}_{3}\sigma^{2}(R_{3}) + 2w_{1}w_{2}Cov(R_{1},R_{2}) + 2w_{1}w_{3}Cov(R_{1},R_{3}) + 2w_{2}w_{3}Cov(R_{2},R_{3})
Explanation
Explanation for Threeasset portfolio:
 $$E(R_{p})$$: Portfolio return
 $$\sigma^{2}(R_{p})$$: Portfolio variance
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Simple Interest
EconomicsEquation
$$I=Prt \\ A=P(1+rt)$$
Latex Code
I=Prt \\ A=P(1+rt)
Explanation
Latex code for the Simple Interest. I will briefly introduce the notations in this formulation.
 $$I$$: Interest Earned
 $$P$$: Principal/Present Value
 $$r$$: Annual Rate
 $$t$$: Time (years)
 $$A$$: Future Value/Maturity Value
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Compound Interest
EconomicsEquation
$$A = P(1+\frac{r}{m})^{mt}$$
$$A = Pe^{rt}$$
Latex Code
A = P(1+\frac{r}{m})^{mt} \\ A = Pe^{rt}
Explanation
Latex code for the Compound Interest. I will briefly introduce the notations in this formulation.
 $$A$$: Future Value/Maturity Value
 $$P$$: Principal/Present Value
 $$A$$: Annual Rate (decimal)
 $$m$$: Number of Compounding Periods per Year
 $$t$$: Time (years)
 $$A = Pe^{rt}$$: Loan/investment is compounded continuously
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Effective Rate
EconomicsEquation
$$r_{e} = (1 + \frac{r}{m})^{m}  1$$
$$r_{e} = e^{r}  1$$
Latex Code
r_{e} = (1 + \frac{r}{m})^{m}  1 \\ r_{e} = e^{r}  1
Explanation
Latex code for the Effective Rate. I will briefly introduce the notations in this formulation.
 : Effective Rate
 : Compute the effective rate if your loan/investment is compounded m times per year.
 : Compute the effective rate if your loan/investment is compounded continuously.
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Future Value of Ordinary Annuities
EconomicsEquation
$$S = R \times \frac{(1+i)^n  1}{i}$$
$$R = S \times \frac{i}{(1+i)^n  1}$$
Latex Code
S = R \times \frac{(1+i)^n  1}{i} \\ R = S \times \frac{i}{(1+i)^n  1}
Explanation
Latex code for the Future Value of Ordinary Annuities. The payment/deposit is at the END of the period. I will briefly introduce the notations in this formulation.
 $$S$$: Future Value/Total amount accrued
 $$R$$: Payment/Deposit made in each period
 $$i$$: Rate per period
 $$n$$: Total number of times compounded
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Annuities Due
EconomicsEquation
$$S = R \times \frac{(1+i)^(n+1)  1}{i}  R$$
Latex Code
S = R \times \frac{(1+i)^(n+1)  1}{i}  R
Explanation
Latex code for the Future Value of Annuities Due. I will briefly introduce the notations in this formulation. The payment/deposit is at the BEGINNING of the period
 $$S$$: Future Value/Total amount accrued
 $$R$$: Payment/Deposit made in each period
 $$i$$: Rate per period
 $$n$$: Total number of times compounded
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Present Value of Ordinary Annuities
EconomicsEquation
$$P = R \frac{1  (1+r)^{n}}{i}$$
$$R = P \frac{i}{1  (1+r)^{n}}$$
Latex Code
P = R \frac{1  (1+r)^{n}}{i} \\ R = P \frac{i}{1  (1+r)^{n}}
Explanation
Latex code for the Present Value of Ordinary Annuities. I will briefly introduce the notations in this formulation. The payment is made at the END of the period.
 $$S$$: Future Value/Total amount accrued
 $$R$$: Payment/Deposit made in each period
 $$i$$: Rate per period
 $$n$$: Total number of times compounded
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Allocative Efficiency Condition
Economics,MicroeconomicsEquation
$$P = MC$$
$$\text{Marginal Social Benefit (MSB)} = \text{Marginal Social Cost (MSC)}$$
Latex Code
P = MC \\ \text{Marginal Social Benefit (MSB)} = \text{Marginal Social Cost (MSC)}
Explanation
Latex code for the Allocative Efficiency Condition. I will briefly introduce the notations in this formulation. Allocative efficiency occurs when consumer demand is completely met by supply. In other words, businesses are providing the exact supply that consumers want.
 $$MSB$$: Marginal Social Benefit
 $$MSC$$: Marginal Social Cost
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Average Fixed Cost
Economics,MicroeconomicsEquation
$$AFC = \frac{Total Fixed Cost (TFC)}{Quantity of Output (Q)}$$
Latex Code
AFC = \frac{Total Fixed Cost (TFC)}{Quantity of Output (Q)}
Explanation
Latex code for the Allocative Average Fixed Cost. I will briefly introduce the notations in this formulation.
 : Total Fixed Cost
 : Quantity of Output
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Average Product
Economics,MicroeconomicsEquation
$$\text{AP} = \frac{\text{Total Product}}{\text{Quantity of Input}}$$
Latex Code
\text{AP} = \frac{\text{Total Product}}{\text{Quantity of Input}}
Explanation
Latex code for the Average Product. I will briefly introduce the notations in this formulation.
 $$AP$$: Average Product
 $$TP$$: Total Product
 $$QI$$: Quantity of Input
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Average Profit
Economics,MicroeconomicsEquation
$$\text{Average Profit} = \frac{\text{Total Profit}}{\text{Quantity}}$$
Latex Code
\text{Average Profit} = \frac{\text{Total Profit}}{\text{Quantity}}
Explanation
Latex code for the Average Profit. I will briefly introduce the notations in this formulation.
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Average Revenue
Economics,MicroeconomicsEquation
$$\text{Average Revenue} = \frac{\text{Total Revenue}}{\text{Quantity}}$$
Latex Code
\text{Average Revenue} = \frac{\text{Total Revenue}}{\text{Quantity}}
Explanation
Latex code for the Average Revenue. I will briefly introduce the notations in this formulation.
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Average Total Cost
Economics,MicroeconomicsEquation
Latex Code
\text{Average Total Cost(ATC)} = \frac{\text{Total Cost (TC)}}{\text{Quantity of Output (Q)}}
Explanation
Latex code for the Average Revenue. I will briefly introduce the notations in this formulation.
 : Average Total Cost
 : Total Cost
 : Quantity of Output
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Average Variable Cost
Economics,MicroeconomicsEquation
Latex Code
\text{Average Variable Cost(AVC)} = \frac{\text{Total Variable Cost (TVC)}}{\text{Quantity of Output (Q)}}
Explanation
Latex code for the Average Variable Cost. I will briefly introduce the notations in this formulation.
 : Average Variable Cost
 : Total Variable Cost
 : Quantity of Output
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CrossPrice Elasticity of Demand
Economics,MicroeconomicsEquation
Latex Code
\text{Elasticity of Demand} = \frac{\text{Percentage Change in Quantity Demanded of Good X}}{\text{Percentage Change in Price of Good Y}}
Explanation
Latex code for CrossPrice Elasticity of Demand. I will briefly introduce the notations in this formulation.
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Distributive Efficiency Condition
Economics,MicroeconomicsEquation
Latex Code
\frac{MU_{F}}{P_{F}} = \frac{MU_{C}}{P_{C}}
Explanation
Latex code for Distributive Efficiency Condition. I will briefly introduce the notations in this formulation. Distributive efficiency is concerned with an equitable distribution of resources because of the law of diminishing marginal returns. The Law of diminishing marginal returns states that as consumption of a good increase we tend to get diminishing marginal utility.
 : Marginal Utility of F
 : Product of F
 : Marginal Utility of C
 : Product of C
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Elasticity of Supply
Economics,MicroeconomicsEquation
Latex Code
\text{Elasticity of Supply} = \frac{\text{Percentage Change in Quantity Supplied}}{\text{Percentage Change in Price}}
Explanation
Latex code for Elasticity of Supply. I will briefly introduce the notations in this formulation.
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Factor of Production Hiring Rule
Economics,MicroeconomicsEquation
Latex Code
\text{MRP} = \text{MFC}
Explanation
Latex code for Factor of Production Hiring Rule. I will briefly introduce the notations in this formulation.
 : Marginal revenue product
 : Marginal factor cost (MFC)
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Marginal Revenue Product
Economics,MicroeconomicsEquation
Latex Code
\text{MRP} = \text{MP} \times \text{MR}
Explanation
Latex code for Marginal Revenue Product. The amount that an additional unit of a factor adds to a firm's total revenue during a period is called the marginal revenue product (MRP) of the factor. An additional unit of a factor of production adds to a firm’s revenue in a twostep process: first, it increases the firm's output. Second, the increased output increases the firm’s total revenue. We find marginal revenue product by multiplying the marginal product (MP) of the factor by the marginal revenue (MR). I will briefly introduce the notations in this formulation.
 : Marginal Product(MP)
 : Marginal Revenue(MR)
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Gini Coefficient
Economics,MicroeconomicsEquation
Latex Code
G = \frac{S_{A}}{S_{B}} \\ G = 1  \sum^{n}_{i=1} P_{i} \times (2 Q_{i}  W_{i}) \\ Q_{i} = \sum^{i}_{k = 1} W_{k}
Explanation
Latex code for Gini Coefficient. The Gini coefficient (Gini index or Gini ratio) is a statistical measure of economic inequality in a population. The coefficient measures the dispersion of income or distribution of wealth among the members of a population.
 : Area between Line of Perfect Equality and Lorenz Curve.
 : Area of Triangle between Xaxis (Cumulative of Families) and Yaxis(Cumulative of Income).
 : The ratio of ith group's income/total income
 : The ratio of cumulative ith group's income(increasing order)/total income
 : The ratio of ith group's population(P)/total population(P)
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Marginal Cost
Economics,MicroeconomicsEquation
Latex Code
\text{MC} = \frac{\Delta \text{TC}}{\Delta \text{Q}} = \frac{\Delta \text{TVC}}{\Delta \text{Q}}
Explanation
Latex code for Marginal Cost.
 : Total Cost(TC)
 : Change in Total Cost(TC)
 : Quantity
 : Change in Quantity
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Marginal Product of Labor
Economics,MicroeconomicsEquation
Latex Code
\text{MPL} = \frac{\Delta \text{TP}}{\Delta \text{L}}
Explanation
Latex code for Marginal Product of Labor.
 : Marginal Product of Labor
 : Change in Total Product(TP)
 : Change in Labor(L)
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Marginal Revenue
Economics,MicroeconomicsEquation
Latex Code
\text{MR} = \frac{\Delta \text{TR}}{\Delta \text{Q}}
Explanation
Latex code for Marginal Revenue.
 : Marginal Revenue
 : Change in Total Revenue(TR)
 : Change in Quantity(Q)
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Marginal Factor Cost MFC
Economics,MicroeconomicsEquation
Latex Code
\text{MFC} = \frac{\Delta \text{TC}}{\Delta \text{f}}
Explanation
Latex code for Marginal Factor Cost MFC. Marginal factor cost (MFC) is the change in total cost (\Delta \text{TC}}) divided by the change in the quantity of the factor:
 : Marginal Factor Cost
 : Change in total cost
 : Change in the quantity of the factor
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Marginal Revenue Product of Labor MRPL
Economics,MicroeconomicsEquation
Latex Code
\text{MRP}_{L} = \text{MP}_{L} \times \text{P}
Explanation
Latex code for Marginal Revenue Product of Labor MRPL. The marginal revenue product of labor (MRPL) is the marginal product of labor (MPL) times the marginal revenue (which is the same as price under perfect competition) the firm obtains from additional units of output that result from hiring the additional unit of labor.
 : Marginal Revenue Product of Labor
 : Marginal Product of Labor
 : Price
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Optimal Combination of Resources Condition
Economics,MicroeconomicsEquation
Latex Code
\text{MRP}_{L} = \text{MP}_{L} \times \text{P}
Explanation
Latex code for Marginal Revenue Product of Labor MRPL. The marginal revenue product of labor (MRPL) is the marginal product of labor (MPL) times the marginal revenue (which is the same as price under perfect competition) the firm obtains from additional units of output that result from hiring the additional unit of labor.
 : Marginal Revenue Product of Labor
 : Marginal Product of Labor
 : Price
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Optimal Consumption Rule
Economics,MicroeconomicsEquation
Latex Code
\frac{MU_{x}}{P_{x}} = \frac{MU_{Y}}{P_{Y}}
Explanation
Latex code for Optimal Consumption Rule.
 : Marginal utility (MU)
 : Price
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Price Elasticity of Demand
Economics,MicroeconomicsEquation
Latex Code
\text{Price Elasticity of Demand} = \frac{% \Delta Q_{d}}{% \Delta P} = \frac{\frac{\Delta Q_{d}}{Q}}{\frac{\Delta P}{P}}
Explanation
Latex code for Price Elasticity of Demand. Price Elasticity of Demand= Percentage change in quantity demanded / Percentage change in Price
 : Percentage change in quantity demanded
 : Percentage change in Price
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Price for a Competitive Firm
Economics,MicroeconomicsEquation
Latex Code
P = MR
Explanation
Latex code for Price for a Competitive Firm.
 : Marginal revenue (MR)
 : Price
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Production Efficiency Condition
Economics,MicroeconomicsEquation
Latex Code
\frac{w}{r} = \frac{MP_{L}}{MP_{K}}
Explanation
Latex code for Price for a Competitive Firm.
 : Marginal Product Label
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Profit
Economics,MicroeconomicsEquation
Latex Code
\text{Profit} = \text{TR}  \text{TC}
Explanation
Latex code for Price for a Competitive Firm.
 : Total Revenue
 : Total Cost
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ProfitMaximizing Output Level
Economics,MicroeconomicsEquation
Latex Code
MR = MC
Explanation
Latex code for ProfitMaximizing Output Level.
 : Marginal Revenue
 : Marginal Cost
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Slope of the Total Product Curve
Economics,MicroeconomicsEquation
Latex Code
\text{Marginal Product} = \frac{\Delta P}{\Delta L} = \frac{\text{Rise}}{\text{Run}} = \frac{\text{Change in Total Product}}{\text{Change in the Number of Units of an Input}}
Explanation
Latex code for Slope of the Total Product Curve.
 : Change in Total Product
 : Total Product Curve
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Socially Optimal Level of Output
Economics,MicroeconomicsEquation
Latex Code
Explanation
Latex code for Socially Optimal Level of Output.
 : Marginal Social Benefit
 : Marginal Social Cost
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Total Costs
Economics,MicroeconomicsEquation
Latex Code
\text{TC} = \text{TFC} + \text{TVC}
Explanation
Latex code for Socially Optimal Level of Output.
 : Total Costs (TC)
 : Total Fixed Costs (TFC)
 : Total Variable Costs (TVC)
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Investment
Economics,MacroEconomicsEquation
Latex Code
I=I_{P}+I_{U}
Explanation
Latex code for the Investment. Investment during a period equals the sum of planned investment (I_P) and unplanned investment(I_U).
 : Investment
 : Planned investment
 : Unplanned investment
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Aggregate Expenditure Without Government or Foreign Sectors
Economics,MacroEconomicsEquation
Latex Code
\text{AE} = \text{C} + I_{P}
Explanation
Latex code for the Investment. Aggregate expenditures equal the sum of consumption C and planned investment I_{P}. The aggregate expenditures function is the relationship of aggregate expenditures to the value of real GDP.
 : Aggregate Expenditures
 : Consumption
 : Planned investment
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Marginal Propensity to Consume MPC
Economics,MacroEconomicsEquation
Latex Code
\text{MPC} = \frac{\text{Change in Consumption}}{\text{Change in Income}}
Explanation
Latex code for the Marginal Propensity to Consume (MPC).
 : Marginal Propensity to Consume
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Marginal Propensity Save MPS
Economics,MacroEconomicsEquation
Latex Code
\text{MPS} = \frac{\text{Change in Saving}}{\text{Change in Income}}
Explanation
Latex code for the Marginal Propensity Save (MPS).
 : Marginal Propensity Save (MPS)
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Sum of Marginal Propensity to Save and Marginal Propensity to Consume
Economics,MacroEconomicsEquation
Latex Code
\text{MPC} + \text{MPS} = 1
Explanation
Latex code for the Sum of Marginal Propensity to Save and Marginal Propensity to Consume.
 : Marginal Propensity Save (MPS)
 : Marginal Propensity to Consume (MPC)
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Autonomous Spending Multiplier
Economics,MacroEconomicsEquation
Latex Code
\text{Multiplier} = \frac{1}{1MPC} = \frac{1}{MPS}
Explanation
Latex code for the Autonomous Spending Multiplier.
 : Marginal Propensity to Consume
 : Marginal Propensity Save
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Balanced Budget Multiplier
Economics,MacroEconomicsEquation
Latex Code
\text{Balanced Budget Multiplier} = \frac{1}{1MPC} + \frac{MPC}{1MPC} = 1
Explanation
Latex code for the Autonomous Spending Multiplier.
 : Marginal Propensity to Consume
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Banks Reserve Ratio
Economics,MacroEconomicsEquation
Latex Code
\text{Reserve Ratio} = \frac{\text{Bank Reserves}}{\text{Total Deposits}}
Explanation
Latex code for the Banks Reserve Ratio.
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Budget Deficit
Economics,MacroEconomicsEquation
Latex Code
\text{Budget Deficit} = \text{Federal Government Spending}  \text{Tax Collections}
Explanation
Latex code for the Budget Deficit.
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Financial Account Balance
Economics,MacroEconomicsEquation
Latex Code
\text{Financial Account Balance} = \text{Foreign Purchases of Home Assets}  \text{Home Purchases of Foreign Assets}
Explanation
Latex code for the Financial Account Balance.
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Consumer Price Index CPI
Economics,MacroEconomicsEquation
Latex Code
\text{CPI} = \frac{\text{Base Year Quantities} \times \text{Current Year Prices}}{\text{Base Year Quantities} \times \text{Base Year Prices}} \times 100
Explanation
Latex code for Consumer Price Index CPI.
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Consumption Function
Economics,MacroEconomicsEquation
Latex Code
C = C_{a} + \text{MPC}(Y)
Explanation
Latex code for Consumption Function.
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CurrentAccount Balance
Economics,MacroEconomicsEquation
Latex Code
\text{CurrentAccount Balance} + \text{Trade Balance} + \text{Services Balance} + \text{Unilateral}
Explanation
Latex code for CurrentAccount Balance.
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Equality of Leakages and Injections
Economics,MacroEconomicsEquation
Latex Code
\text{S} + \text{T} + \text{M} = \text{I} + \text{G} + \text{X}
Explanation
Latex code for Equality of Leakages and Injections. Injection and leakages in economics, Some transactions put money into the economy – that is, the money is being utilised elsewhere in the economy. These are injections. Some transactions take money out of the economy. That is, the money is not being utilised elsewhere in the economy. These are leakages.
 : Investment
 : Government Spending
 : Exports
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Equation of Exchange
Economics,MacroEconomicsEquation
Latex Code
\text{MV} = \text{PQ}
Explanation
Latex code for Equation of Exchange. The equation of exchange says simply that total spending on goods and services, measured as MV, equals total spending on goods and services, measured as PY (or nominal GDP). The equation of exchange is thus an identity, a mathematical expression that is true by definition.
 : Total spending on goods and services, measured as Monetary Value
 : Total spending on goods and services, measured as PY (or nominal GDP)
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Investment
Economics,MacroEconomicsEquation
Latex Code
I=I_{P}+I_{U}
Explanation
Latex code for the Investment. Investment during a period equals the sum of planned investment (I_P) and unplanned investment(I_U).
 : Investment
 : Planned investment
 : Unplanned investment
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Aggregate Expenditure Without Government or Foreign Sectors
Economics,MacroEconomicsEquation
Latex Code
\text{AE} = \text{C} + I_{P}
Explanation
Latex code for the Investment. Aggregate expenditures equal the sum of consumption C and planned investment I_{P}. The aggregate expenditures function is the relationship of aggregate expenditures to the value of real GDP.
 : Aggregate Expenditures
 : Consumption
 : Planned investment
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Marginal Propensity to Consume MPC
Economics,MacroEconomicsEquation
Latex Code
\text{MPC} = \frac{\text{Change in Consumption}}{\text{Change in Income}}
Explanation
Latex code for the Marginal Propensity to Consume (MPC).
 : Marginal Propensity to Consume
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Marginal Propensity Save MPS
Economics,MacroEconomicsEquation
Latex Code
\text{MPS} = \frac{\text{Change in Saving}}{\text{Change in Income}}
Explanation
Latex code for the Marginal Propensity Save (MPS).
 : Marginal Propensity Save (MPS)
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Sum of Marginal Propensity to Save and Marginal Propensity to Consume
Economics,MacroEconomicsEquation
Latex Code
\text{MPC} + \text{MPS} = 1
Explanation
Latex code for the Sum of Marginal Propensity to Save and Marginal Propensity to Consume.
 : Marginal Propensity Save (MPS)
 : Marginal Propensity to Consume (MPC)
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Autonomous Spending Multiplier
Economics,MacroEconomicsEquation
Latex Code
\text{Multiplier} = \frac{1}{1MPC} = \frac{1}{MPS}
Explanation
Latex code for the Autonomous Spending Multiplier.
 : Marginal Propensity to Consume
 : Marginal Propensity Save
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Balanced Budget Multiplier
Economics,MacroEconomicsEquation
Latex Code
\text{Balanced Budget Multiplier} = \frac{1}{1MPC} + \frac{MPC}{1MPC} = 1
Explanation
Latex code for the Autonomous Spending Multiplier.
 : Marginal Propensity to Consume
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Banks Reserve Ratio
Economics,MacroEconomicsEquation
Latex Code
\text{Reserve Ratio} = \frac{\text{Bank Reserves}}{\text{Total Deposits}}
Explanation
Latex code for the Banks Reserve Ratio.
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Budget Deficit
Economics,MacroEconomicsEquation
Latex Code
\text{Budget Deficit} = \text{Federal Government Spending}  \text{Tax Collections}
Explanation
Latex code for the Budget Deficit.
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Financial Account Balance
Economics,MacroEconomicsEquation
Latex Code
\text{Financial Account Balance} = \text{Foreign Purchases of Home Assets}  \text{Home Purchases of Foreign Assets}
Explanation
Latex code for the Financial Account Balance.
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Consumer Price Index CPI
Economics,MacroEconomicsEquation
Latex Code
\text{CPI} = \frac{\text{Base Year Quantities} \times \text{Current Year Prices}}{\text{Base Year Quantities} \times \text{Base Year Prices}} \times 100
Explanation
Latex code for Consumer Price Index CPI.
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Consumption Function
Economics,MacroEconomicsEquation
Latex Code
C = C_{a} + \text{MPC}(Y)
Explanation
Latex code for Consumption Function.
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CurrentAccount Balance
Economics,MacroEconomicsEquation
Latex Code
\text{CurrentAccount Balance} + \text{Trade Balance} + \text{Services Balance} + \text{Unilateral}
Explanation
Latex code for CurrentAccount Balance.
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Equality of Leakages and Injections
Economics,MacroEconomicsEquation
Latex Code
\text{S} + \text{T} + \text{M} = \text{I} + \text{G} + \text{X}
Explanation
Latex code for Equality of Leakages and Injections. Injection and leakages in economics, Some transactions put money into the economy – that is, the money is being utilised elsewhere in the economy. These are injections. Some transactions take money out of the economy. That is, the money is not being utilised elsewhere in the economy. These are leakages.
 : Investment
 : Government Spending
 : Exports
Related Documents
Related Videos

Equation of Exchange
Economics,MacroEconomicsEquation
Latex Code
\text{MV} = \text{PQ}
Explanation
Latex code for Equation of Exchange. The equation of exchange says simply that total spending on goods and services, measured as MV, equals total spending on goods and services, measured as PY (or nominal GDP). The equation of exchange is thus an identity, a mathematical expression that is true by definition.
 : Total spending on goods and services, measured as Monetary Value
 : Total spending on goods and services, measured as PY (or nominal GDP)
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Gross Domestic Product GDP
Economics,MacroEconomicsEquation
Latex Code
\text{GDP}= \text{C} + \text{G} + \text{I} + \text{NX}=\text{C}+\text{I}+\text{G}+(\text{X}\text{M}) \\ \text{GDP} = \text{Total National Income} + \text{Sales Taxes} + \text{Depreciation} + \text{Net Foreign Factor Income}
Explanation
Latex code for Gross Domestic Product. There are two primary methods or formulas by which GDP can be determined: 1. Expenditure Approach, The expenditure approach is the most commonly used GDP formula, which is based on the money spent by various groups that participate in the economy. GDP = C + G + I + NX. 2. Income Approach, This GDP formula takes the total income generated by the goods and services produced. GDP = Total National Income + Sales Taxes + Depreciation + Net Foreign Factor Income
 : Gross Domestic Product
 : consumption or all private consumer spending within a country’s economy, including, durable goods (items with a lifespan greater than three years), nondurable goods (food & clothing), and services.
 : total government expenditures, including salaries of government employees, road construction/repair, public schools, and military expenditure.
 : net exports or a country's total exports less total imports
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Gross Domestic Product Deflator
Economics,MacroEconomicsEquation
Latex Code
\text{GDP Deflator}= \frac{\text{Current Year Quantities} \times \text{Current Year Prices}}{\text{Current Year Quantities} \times \text{Base Year Prices}} \times 100
Explanation
Latex code for Gross Domestic Product Deflator.
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Inflation Between Two Years
Economics,MacroEconomicsEquation
Latex Code
\text{Inflation Between Years Y and Z}= [\frac{\text{CPI in Year Z}}{\text{CPI in Year Y}}  1] \times 100
Explanation
Latex code for Inflation Between Two Years Y and Z.
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Merchandise Trade Balance
Economics,MacroEconomicsEquation
Latex Code
\text{Merchandise Trade Balance}=\text{Value of Merchandise Exports}  \text{Value of Merchandise Imports}
Explanation
Latex code for Merchandise Trade Balance.
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Nominal Interest Rate
Economics,MacroEconomicsEquation
Latex Code
\text{Nominal Interest Rate}=\text{Real Interest Rate} + \text{Anticipated Inflation}
Explanation
Latex code for Nominal Interest Rate.
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Real GDP
Economics,MacroEconomicsEquation
Latex Code
\text{Real GDP}=\frac{Nominal GDP}{CPI for the same year as the nominal figure} \times 100
Explanation
Latex code for Real GDP.
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Real Interest Rate
Economics,MacroEconomicsEquation
Latex Code
\text{Real Interest Rate} = \text{Nominal Interest Rate}  \text{Anticipated Inflation}
Explanation
Latex code for Real Interest Rate.
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Tax Multiplier
Economics,MacroEconomicsEquation
Latex Code
\text{Tax Multiplier} = \frac{MPC}{MPS}
Explanation
Latex code for Tax Multiplier.
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Unemployment Rate
Economics,MacroEconomicsEquation
Latex Code
\text{Unemployment Rate} = \frac{\text{Unemployed}}{\text{Labor Force}}
Explanation
Latex code for Unemployment Rate.
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Gross Domestic Product GDP
Economics,MacroEconomicsEquation
Latex Code
\text{GDP}= \text{C} + \text{G} + \text{I} + \text{NX}=\text{C}+\text{I}+\text{G}+(\text{X}\text{M}) \\ \text{GDP} = \text{Total National Income} + \text{Sales Taxes} + \text{Depreciation} + \text{Net Foreign Factor Income}
Explanation
Latex code for Gross Domestic Product. There are two primary methods or formulas by which GDP can be determined: 1. Expenditure Approach, The expenditure approach is the most commonly used GDP formula, which is based on the money spent by various groups that participate in the economy. GDP = C + G + I + NX. 2. Income Approach, This GDP formula takes the total income generated by the goods and services produced. GDP = Total National Income + Sales Taxes + Depreciation + Net Foreign Factor Income
 : Gross Domestic Product
 : consumption or all private consumer spending within a country’s economy, including, durable goods (items with a lifespan greater than three years), nondurable goods (food & clothing), and services.
 : total government expenditures, including salaries of government employees, road construction/repair, public schools, and military expenditure.
 : net exports or a country's total exports less total imports
Related Documents
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Gross Domestic Product Deflator
Economics,MacroEconomicsEquation
Latex Code
\text{GDP Deflator}= \frac{\text{Current Year Quantities} \times \text{Current Year Prices}}{\text{Current Year Quantities} \times \text{Base Year Prices}} \times 100
Explanation
Latex code for Gross Domestic Product Deflator.
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Inflation Between Two Years
Economics,MacroEconomicsEquation
Latex Code
\text{Inflation Between Years Y and Z}= [\frac{\text{CPI in Year Z}}{\text{CPI in Year Y}}  1] \times 100
Explanation
Latex code for Inflation Between Two Years Y and Z.
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Merchandise Trade Balance
Economics,MacroEconomicsEquation
Latex Code
\text{Merchandise Trade Balance}=\text{Value of Merchandise Exports}  \text{Value of Merchandise Imports}
Explanation
Latex code for Merchandise Trade Balance.
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Nominal Interest Rate
Economics,MacroEconomicsEquation
Latex Code
\text{Nominal Interest Rate}=\text{Real Interest Rate} + \text{Anticipated Inflation}
Explanation
Latex code for Nominal Interest Rate.
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Real GDP
Economics,MacroEconomicsEquation
Latex Code
\text{Real GDP}=\frac{Nominal GDP}{CPI for the same year as the nominal figure} \times 100
Explanation
Latex code for Real GDP.
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Real Interest Rate
Economics,MacroEconomicsEquation
Latex Code
\text{Real Interest Rate} = \text{Nominal Interest Rate}  \text{Anticipated Inflation}
Explanation
Latex code for Real Interest Rate.
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Tax Multiplier
Economics,MacroEconomicsEquation
Latex Code
\text{Tax Multiplier} = \frac{MPC}{MPS}
Explanation
Latex code for Tax Multiplier.
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Unemployment Rate
Economics,MacroEconomicsEquation
Latex Code
\text{Unemployment Rate} = \frac{\text{Unemployed}}{\text{Labor Force}}
Explanation
Latex code for Unemployment Rate.
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Basic EPS
Math,FinanceEquation
$$ \text{Basic EPS}=\frac{\text{Net income}  \text{Preferred dividends}}{\text{Weighted average number of shares outstanding}} $$
Latex Code
\text{Basic EPS}=\frac{\text{Net income}  \text{Preferred dividends}}{\text{Weighted average number of shares outstanding}}
Explanation
Explanation for Basic EPS
 $$\text{Basic EPS}$$: Basic Earning Per Share
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Diluted EPS
Math,FinanceEquation
$$\text{Diluted EPS}=\frac{\text{Net Income}}{\text{Weighted average number of shares outstanding}  \text{Net Common Shares that Would Have Been Issued at Conversion}}$$
Latex Code
\text{Diluted EPS}=\frac{\text{Net Income}}{\text{Weighted average number of shares outstanding}  \text{Net Common Shares that Would Have Been Issued at Conversion}}
Explanation
Explanation for Diluted EPS, if preferred Shares is converted to ordinary shares.
 $$\text{Diluted EPS}$$: Diluted Earning Per Share
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Balance Sheet
Math,FinanceEquation
$$\text{Assets}=\text{Liabilities} + \text{Equity}$$
Latex Code
\text{Assets}=\text{Liabilities} + \text{Equity}
Explanation
 $$\text{Assets}$$: Assets
 $$\text{Liabilities}$$: Liabilities
 $$\text{Equity}$$: Equity
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Cash Flow To Revenue Ratio
Math,FinanceEquation
$$\text{Cash Flow to Revenue Ratio}=\frac{\text{Cash Flow from Operating}}{\text{Net Revenue}}$$
Latex Code
\text{Cash Flow to Revenue Ratio}=\frac{\text{Cash Flow from Operating}}{\text{Net Revenue}}
Explanation
 $$\text{CFO}$$: Cash Flow from Operating
 $$\text{Net Revenue}$$: Net Revenue
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Cash Return On Assets
Math,FinanceEquation
$$\text{Cash Return On Assets}=\frac{\text{CFO}}{\text{Average Total Assets}}$$
Latex Code
\text{Cash Return On Assets}=\frac{\text{CFO}}{\text{Average Total Assets}}
Explanation
 $$\text{CFO}$$: Cash Flow from Operating
 $$\text{Average Total Assets}$$: Average Total Assets
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Cash To Income
Math,FinanceEquation
$$\text{Cash To Income}=\frac{\text{CFO}}{\text{Operating Income}}$$
Latex Code
\text{Cash To Income}=\frac{\text{CFO}}{\text{Operating Income}}
Explanation
 $$\text{CFO}$$: Cash Flow from Operating
 $$\text{Operating Income}$$: Operating Income
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Cash flow Per Share
Math,FinanceEquation
$$\text{Cash flow Per Share}=\frac{\text{CFOPreferred Dividents}}{\text{Number of Common Shares Outstanding}}$$
Latex Code
Explanation
 $$\text{CFO}$$: Cash Flow from Operating
 $$\text{Preferred Dividents}$$: Preferred Dividents
 $$\text{Number of Common Shares Outstanding}$$: Number of Common Shares Outstanding
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Free Cash Flow to the Firm
Math,FinanceEquation
$$FCFF=NI +NCC + Int(1T) FCInvWCInv$$
$$=CFO+Int(1T)FCInv$$
Latex Code
FCFF=NI +NCC + Int(1T) FCInvWCInv \\ =CFO+Int(1T)FCInv
Explanation
 $$\text{NI}$$: Net Income
 $$\text{NCC}$$: NonCash Charges
 $$\text{Int}$$: Interest Expense
 $$\text{FCInv}$$: Capital Expenditures
 $$\text{WCInv}$$: Working capital expenditure
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Debt Coverage Ratio
Math,FinanceEquation
$$\text{Debt Coverage Ratio}=\frac{\text{CFO}}{\text{Total Debt}}$$
Latex Code
\text{Debt Coverage Ratio}=\frac{\text{CFO}}{\text{Total Debt}}
Explanation
 $$\text{CFO}$$: Cash Flow from Operating
 $$\text{Total Debt}$$: Total Debt
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Interest coverage ratio
Math,FinanceEquation
$$\text{Interest coverage ratio}=\frac{\text{CFO} + \text{Interest Paid} + \text{Taxes Paid}}{\text{Interest Paid}}$$
Latex Code
\text{Interest coverage ratio}=\frac{\text{CFO} + \text{Interest Paid} + \text{Taxes Paid}}{\text{Interest Paid}}
Explanation
 $$\text{CFO}$$: Cash Flow from Operating
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Reinvestment Coverage Ratio
Math,FinanceEquation
$$\text{Reinvestment Coverage Ratio}=\frac{\text{CFO}}{\text{Cash Paid for Long Term Asset}}$$
Latex Code
\text{Reinvestment Coverage Ratio}=\frac{\text{CFO}}{\text{Cash Paid for Long Term Asset}}
Explanation
 $$\text{CFO}$$: Cash Flow from Operating
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Debt Payment Coverage Ratio
Math,FinanceEquation
$$\text{Debt Payment Coverage Ratio}=\frac{\text{CFO}}{\text{Cash Paid for Long Term Debt Repayment}}$$
Latex Code
\text{Debt Payment Coverage Ratio}=\frac{\text{CFO}}{\text{Cash Paid for Long Term Debt Repayment}}
Explanation
 $$\text{CFO}$$: Cash Flow from Operating
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Inventory Turnover
Math,FinanceEquation
$$\text{Inventory Turnover}=\frac{\text{Cost of Goods Sold}}{\text{Average Inventory}}$$
Latex Code
\text{Inventory Turnover}=\frac{\text{Cost of Goods Sold}}{\text{Average Inventory}}
Explanation
 $$\text{Inventory Turnover}$$: Inventory Turnover
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Days of Inventory On Hand (DOH)
Math,FinanceEquation
$$\text{Days of Inventory On Hand}=\frac{\text{Average Inventory}}{\text{Cost of Goods Sold}} \times 365$$
Latex Code
\text{Days of Inventory On Hand}=\frac{\text{Average Inventory}}{\text{Cost of Goods Sold}} \times 365
Explanation
 $$\text{Days of Inventory On Hand}$$: Days of Inventory On Hand
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Receivables Turnover
Math,FinanceEquation
$$\text{Receivables Turnover}=\frac{\text{Revenue}}{\text{Average Receivables}}$$
Latex Code
\text{Receivables Turnover}=\frac{\text{Revenue}}{\text{Average Receivables}}
Explanation
 $$\text{Receivables Turnover}$$: Receivables Turnover
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Days of Sales Outstanding
Math,FinanceEquation
$$\text{Days of Sales Outstanding}=\frac{\text{Average Receivables}}{\text{Revenue}} \times 365$$
Latex Code
\text{Days of Sales Outstanding}=\frac{\text{Average Receivables}}{\text{Revenue}} \times 365
Explanation
 $$\text{Days of Sales Outstanding}$$: Days of Sales Outstanding
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