Which of the following best approximates Okun's law?
A)a 1 percent increase in output leads to a 2 percent decrease in unemployment
B)a 1 percent increase in output leads to a 1 percent decrease in unemployment
C)a 2 percent increase in output leads to a 4 percent increase in unemployment
D)a 2 percent increase in output leads to a 1 percent decrease in unemployment
E)none of the above

Question

Quizplus · Accepted Answer

Okun's law posits that a 1% increase in the unemployment rate is associated with a 2% decrease in GDP, or conversely, a 2% increase in output (GDP) is associated with a 1% decrease in the unemployment rate.

Which of the Following Best Approximates Okun's Law