Okun's law indicates that for
A) every 1 percent that the actual unemployment rate exceeds the natural unemployment rate, a 2 percent GDP gap is generated.
B) every 1 percent that the actual unemployment rate exceeds the natural unemployment rate, a 5 percent GDP gap is generated.
C) a 5 percent GDP gap, a 1 percent increase in the natural unemployment rate is generated.
D) a 2 percent GDP gap, a 2 percent increase in the actual unemployment rate is generated.

Question

Quizplus · Accepted Answer

Okun's law states that for every 1 percent that the actual unemployment rate exceeds the natural unemployment rate, a 2 percent GDP gap is generated.

Okun's Law Indicates That for