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# ECON 203- Final Exam Guide - Comprehensive Notes for the exam ( 152 pages long!)

152 pages231 viewsSpring 2018

Department
Economics
Course Code
ECON 203
Professor
Aamir Hashmi
Study Guide
Final

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U of C
ECON 203
Final EXAM
STUDY GUIDE

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Chapter 10
The amount of money the banking system generates with each dollar of reserves is called
the money multiplier, which is the reciprocal of the reserve ratio. If the reserve ratio is ¼,
the money multiplier is equal to 4, and a \$120 increase in reserves will increase the money
supply by \$120×4=\$480\$120×4=\$480 .
Nominal Interest Rate is calculated as follows:
nominal rate = real interest rate + inflation rate.
After-Tax Nominal Interest Rate is calculated as follows:
After-Tax Nominal Interest Rate = (1- tax rate)* Nominal Interest Rate
After-Tax Real Interest Rate is calculated as follows:
After-Tax Real Interest Rate = After-Tax nominal Interest Rate - Inflation rate
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Y(GDP) = C(consumption)+ I(investment) + G(government) + NX (net exports)
Net exports = Export Import
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