Short Run Macroeconomics Flashcards by Gus Bennett | Brainscape

Q

Output Gap

A

((Yt – Yt*)/Yt) ×100

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Q

Okun’s Law

A

ut – ut * = (β((Yt – Yt * )/Yt) ×100) = β([output gap])

β is sensitivity of output to changes in unemployment

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Q

Short Run Output

A

Y= 1/(1 –c ) × (C̅ – cT̅ + I̅ + G̅)

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