According to Okun's Law, for Each 1 Percentage Point That

question 44

Multiple Choice

According to Okun's Law, for each 1 percentage point that the unemployment rate is above the natural unemployment rate, then

• A) the inflation rate is greater than the expected inflation rate by 2 percentage points.
• B) the inflation rate is less than the expected inflation rate by 1 percentage point.
• C) real GDP is above potential GDP by 2 per cent.
• D) real GDP is below potential GDP by 2 per cent.
• E) the real interest rate is below the natural real interest rate by 1 percentage point.

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