Rentabilidad

• Phillips curve is a historical inverse relationship between the rate of unemployment and the rate of inflation in an economy. Stated simply, lower unemployment in an economy is correlated with a higher rate of inflation.

o Long Run- Shows the relationship between inflation and unemployment when the actual inflation rate equals the expected inflation rate.

o Short Run- Shows the relationship between inflation and unemployment, holding the expected inflation rate and the natural rate of unemployment constant.

• GDP (Gross Domestic Product)- It represents the total dollar value of all goods and services produced over a specific time period - you can think of it as the size of the economy.

o Real GDP- measure of the value of economic output adjusted for price changes

o GDP deflator for year t = nominal GDPt / Real GDPt

o Potential GDP-is a measurement of what a country's gross domestic product would be if it were operating at full employment and utilizing all of its resources.

o Double Dip Recession- When gross domestic product (GDP) growth slides back to negative after a quarter or two of positive growth. A double-dip recession refers to a recession followed by a short-lived recovery, followed by another recession.

• Unemployement- occurs when people are without work and actively seeking work.

o Unemployement Rate- s a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force.

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