Okun's law describes the_long-run v relationship between the unemployment rate and the growth rate of real GDP. The following table presents hypothetical employment data for the UK economy in four consecutive years. In the following table, use Okun's law to predict the percentage change in real GDP from the previous year. Year Unemployment Rate Percentage Change in Real GDP 0.05 2001 5.00% 2002 5.95% 0.25 2003 5.60% 3.50 2004 4.88% 0.40 Based on the predictions of Okun's law, GDP will rise by 3.5% when unemployment by percentage points.

Okun's law describes the_long-run v relationship between the unemployment rate and the growth rate of real GDP. The following table presents hypothetical employment data for the UK economy in four consecutive years. In the following table, use Okun's law to predict the percentage change in real GDP from the previous year. Year Unemployment Rate Percentage Change in Real GDP 0.05 2001 5.00% 2002 5.95% 0.25 2003 5.60% 3.50 2004 4.88% 0.40 Based on the predictions of Okun's law, GDP will rise by 3.5% when unemployment by percentage points.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter10: Aggregate Supply

Section: Chapter Questions

Problem 1.1P

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