Suppose Potential GDP Is $100 Billion and the Natural Unemployment

question 21

Multiple Choice

Suppose potential GDP is $100 billion and the natural unemployment rate is 5 percent. If the unemployment rate is 6 percent, then according to Okun's Law real GDP is

• A)$102 billion.
• B)$98 billion.
• C)$100 billion.
• D)$101 billion.
• E)$99 billion.

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Definitions:

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A statistical test used to determine the effect of two or more categorical independent variables on a continuous dependent variable.

Obtained Value

The actual measured or calculated value resulting from a scientific experiment or survey.

Main Effect

The direct impact of an independent variable on a dependent variable in an experiment.