On normal speed time passes at the rate of 12 years per 24-hour day. Slow is half that rate, and fast is twice that rate.
Since Village Sim is a "real time" game, even though nothing is happening in the game during the time that an event popup is being displayed, everything will "catch up" as soon as the event screen(s) are cleared. The only time that the game is really paused (and stays that way) is when you have selected Pause from the preferences screen.
