Unemployment
Notes from (2/5/16 and 2/8/16)
GDP Gap- The amount by which actual GDP falls short or potential GDP
(ARU - NRU) x 2 = GDP Gap
Okun's Law- For every 1% by which actual unemployment rate exceeds the natural rate of unemployment (NRU), a GDP Gap of about 2% occurs
Rule of 70- Used to determine how many years it will take for a value to double given a particular annual growth rate
Example: You put $20,000 in the bank and earns a yearly interest rate of 7%. How many years will it take for your income to double?
70 divided by the 7% interest rate = 10 years
-JaelyNoTainted
Like Jaelyn (SPACE) Not (SPACE) Tainted
Get it?
-JaelyNoTainted
Like Jaelyn (SPACE) Not (SPACE) Tainted
Get it?
The equation for GDP Gap was helpful. Next time include a video to demonstrate it.
ReplyDeleteThanks for sharing, I learned something new today, which was okun's law.
ReplyDelete