For every 1 percent that the actual unemployment rate exceeds the natural rate, there is generated a 2 percent GDP gap.This is a statement of:
A)Stratford's law.
B)Okun's law.
C)the law of nominal incomes.
D)the rule of 70.

Question

Quizplus · Accepted Answer

This statement is known as Okun's law, which suggests that there is a negative relationship between unemployment and GDP. For every 1 percent increase in unemployment above the natural rate, there will be a 2 percent decrease in GDP.

For Every 1 Percent That the Actual Unemployment Rate Exceeds