In Macroland,a country that operates according to Okun's law,potential GDP equals $10 trillion,the actual rate of unemployment is 8%,and the natural unemployment rate is 6%.What is actual GDP in Macroland?

Question

Quizplus · Accepted Answer

According to Okun's law, for every 1% increase in the unemployment rate above the natural rate, GDP falls by about 2% from its potential. The unemployment rate is 2% above the natural rate, so GDP is reduced by 4% from the potential $10 trillion, resulting in $9.6 trillion.

In Macroland,a Country That Operates According to Okun's Law,potential GDP