According to recent estimates of Okun's law, if the unemployment rate FELL by a full percentage point, it would most probably be attributable to a _____ in real GDP.

Question

Quizplus · Accepted Answer

Okun's law states that for every 1% decrease in the unemployment rate, there is an associated increase in real GDP of approximately 2%. Therefore, for the reverse scenario of a 1% decrease in the unemployment rate, it would correspond to a 2% increase in real GDP. Therefore, the correct answer is B) 2% increase.

According to Recent Estimates of Okun's Law, If the Unemployment