The relationship between actual output in an economy, the long-run component, and the short-run component is given as Current output =Long-run trend+ Short-run fluctuations.

Question

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The equation presented in the statement is known as the "Okun's Law" which expresses the inverse relationship between changes in unemployment and real GDP. It shows that actual output in an economy (F1F1F1S1) can be decomposed into two main components: the long-run trend component (F1F1F1S1) and the short-run fluctuations component (F1F1F10).

The Relationship Between Actual Output in an Economy, the Long-Run