In Macroland,a Country That Operates According to Okun's Law,actual GDP

question 91

Multiple Choice

In Macroland,a country that operates according to Okun's law,actual GDP is $9.6 trillion,the actual rate of unemployment is 8%,and the natural unemployment rate is 6%.What is potential GDP in Macroland?

• A) $9.6 trillion.
• B) $9.8 trillion.
• C) $10.0 trillion.
• D) $10.2 trillion.
• E) $10.4 trillion.

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Definitions:

Information Ratio

A measure of portfolio returns above the returns of a benchmark, typically used to assess the ability of portfolio managers.

Residual Standard Deviation

A statistical measure used in finance to estimate the deviation of investment returns from an expected return or the performance benchmark, indicating the risk involved.

Beta

A measure of a security's volatility in relation to the overall market, indicating its relative risk.

Risk-Free Return

The hypothetical earnings from an investment that carries no risk, typically illustrated by the return on government bonds, such as U.S. Treasury bills.