According to Okun's Law,when Cyclical Unemployment Increases by One Percentage

question 148

Multiple Choice

According to Okun's law,when cyclical unemployment increases by one percentage point,the output gap ________ by _______ percentage point(s) ,measured in relation to potential output.

• A) increases;one
• B) increases;two
• C) decreases;one
• D) decreases;two
• E) decreases;three

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Definitions:

Price Level

The collective median of current prices for goods and services in the economy.

Short-Run Aggregate Supply Curve

A curve that shows the relationship between the price level and the quantity of goods and services that firms are willing and able to supply in the short run.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price over a specific time period.

Price Level

An index reflecting the overall cost of commodities and services within an economy during a particular period.