GDP Gap: the amount by which actual GDP falls short of potential GDP.
Okun's Law: for every 1% that the actual unemployment rat6e in which the actual unemployment excludes the actual rate at unemployment. A GDP gap of about 2%.
EXAMPLE- In 2012 the unemployment rate for Mexico was 7.4% and the NRU was 6%
Rule of 70: It is used to determine how many years it will take for a value to double given a particular annual growth rate.
If you put $20,000 in the bank and it earns year interest of 7% how many years will it take your income to double.
70 divided
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interest rate
In the problem above you would do 70/ 7 which will give you 10%
ALWAYS DIVIDE BY 70
For more information on Okun's Law you can check this link:
https://www.youtube.com/watch?v=y-XArN4h8nw
For more information on Rule of 70 you can check this link
https://www.youtube.com/watch?v=AoQJz1N6pxc
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