Which of the following statements best describes Okun's law?
A)For each 1% that output is greater than potential output, the unemployment rate is 0.5% below the natural rate of unemployment.
B)For each 1% that output is greater than potential output, the unemployment rate is 0.5% above the natural rate of unemployment.
C)For each 0.5% that output is lower than potential output, the unemployment rate is 1% below the natural rate of unemployment.
D)For each 0.5% that output is lower than potential output, the unemployment rate is 1% above the natural rate of unemployment.

Question

Quizplus · Accepted Answer

Okun's law suggests that for each 1% increase in output above potential output, the unemployment rate decreases by about 0.5% below the natural rate of unemployment.

Which of the Following Statements Best Describes Okun's Law