EconomicsLesson 3 of 5

Macroeconomics: GDP, IS-LM & Solow Growth

Taught in English

Questo esame si sostiene in inglese: le lezioni e le domande sono in inglese. L'interfaccia resta in italiano.

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Key formulas

GDP (Expenditure Approach)

GDP=C+I+G+NX

C = consumption, I = investment, G = government spending, NX = net exports.

Real GDP

Real GDP=(Nominal GDP / GDP Deflator)×100

Holds prices fixed to measure genuine output change, not inflation.

Solow Steady State

s·f(k*)=(n+δ+g)·k*

Investment per worker equals effective capital dilution. k* is the steady-state capital per worker.

s: savings rate
n: labour force growth rate
δ: depreciation rate
g: technology growth rate
k*: steady-state capital per worker

Solow Residual (TFP Growth)

ΔA/A=ΔY/Y−α(ΔK/K)−(1−α)(ΔL/L)

The part of GDP growth not explained by capital or labour accumulation. Measures productivity.

Part 1 of 1

GDP Accounting

Expenditure approach — the formula everyone must know:

GDP=C+I+G+NX

C = private consumption (households)
I = gross investment (firms buying capital — not financial investment)
G = government purchases of goods and services (not transfer payments)
NX = net exports = exports − imports

Real vs. nominal

Real GDP=(Nominal GDP / GDP Deflator)×100

Nominal GDP rises with both output and prices. Real GDP strips out inflation to measure genuine growth.

Worked example

Economy in 2024: C=€800bn, I=€150bn, G=€200bn, exports=€120bn, imports=€100bn. NX=€20bn. GDP = 800+150+200+20 = €1,170bn. If GDP deflator is 110 (base year=100): Real GDP = (1,170/110)×100 = €1,064bn.

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Consumer Theory & Utility Maximization Financial Markets, CAPM & Asset Pricing

Macroeconomics: GDP, IS-LM & Solow Growth

Taught in English

Questo esame si sostiene in inglese: le lezioni e le domande sono in inglese. L'interfaccia resta in italiano.

100%

Hold ⌘ / Ctrl and scroll to zoom

SubjectLessonDone

Drag to pan · ⌘/Ctrl + scroll or pinch to zoom · tap a node for detail · +/− to expand a branch

Key formulas

GDP (Expenditure Approach)

GDP=C+I+G+NX

C = consumption, I = investment, G = government spending, NX = net exports.

Real GDP

Real GDP=(Nominal GDP / GDP Deflator)×100

Holds prices fixed to measure genuine output change, not inflation.

Solow Steady State

s·f(k*)=(n+δ+g)·k*

Investment per worker equals effective capital dilution. k* is the steady-state capital per worker.

s: savings rate
n: labour force growth rate
δ: depreciation rate
g: technology growth rate
k*: steady-state capital per worker

Solow Residual (TFP Growth)

ΔA/A=ΔY/Y−α(ΔK/K)−(1−α)(ΔL/L)

The part of GDP growth not explained by capital or labour accumulation. Measures productivity.

Part 1 of 1

GDP Accounting

Expenditure approach — the formula everyone must know:

GDP=C+I+G+NX

C = private consumption (households)
I = gross investment (firms buying capital — not financial investment)
G = government purchases of goods and services (not transfer payments)
NX = net exports = exports − imports

Real vs. nominal

Real GDP=(Nominal GDP / GDP Deflator)×100

Nominal GDP rises with both output and prices. Real GDP strips out inflation to measure genuine growth.

Worked example

Unlock Full Lesson & Timed Practice Drills

Gain full lifetime access to all 5 lessons in Economics & Finance, interactive MindMaps, step-by-step solved questions, and full timed mock exams for UniMi MEF.

Unlock Full UniMi MEF Pass (€29)

Macroeconomics: GDP, IS-LM & Solow Growth

GDP AccountingGDP Accounting

Real vs. nominal

Unlock Full Lesson & Timed Practice Drills

Macroeconomics: GDP, IS-LM & Solow Growth

GDP AccountingGDP Accounting

Real vs. nominal

Unlock Full Lesson & Timed Practice Drills

GDP Accounting

GDP Accounting