If Okun's Law holds true, then a 9% increase in GDP would lead to a ________ percentage point decrease in the unemployment rate.

Question

Quizplus · Accepted Answer

Okun's Law suggests that for every 1% increase in GDP, the unemployment rate decreases by about 0.3 percentage points. Therefore, a 9% increase in GDP would lead to a 2.7% decrease in the unemployment rate, which is closest to 3 percentage points.

If Okun's Law Holds True, Then a 9% Increase in GDP