Okun's Rule of Thumb States That A

question 42

Multiple Choice

Okun's rule of thumb states that a:

• A)2 percentage point rise in the unemployment rate will tend to be associated with a 1 percent fall in output from its trend and vice versa.
• B)2 percentage point rise in the unemployment rate will tend to be associated with a 1 percent rise in output from its trend and vice versa.
• C)1 percentage point rise in the unemployment rate will tend to be associated with a 2 percent fall in output from its trend and vice versa.
• D)1 percentage point rise in the unemployment rate will tend to be associated with a 2 percent rise in output from its trend and vice versa.

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Definitions:

Probability

The measure of the likelihood that an event will occur, often expressed as a number between 0 and 1.

NORM.DIST

A function in software packages, such as Excel, used to calculate the normal distribution of a set of data.

Point Estimate

A single value estimate that serves as the best guess or most likely value for a population parameter based on sample data.

Population Parameter

A numerical value that characterizes a certain aspect of a population, such as its mean or standard deviation.