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

question 86

Multiple Choice

In Okunland,a country that operates according to Okun's law,actual GDP equals $7,520 billion,the actual rate of unemployment is 8%,and the natural unemployment rate is 5%.What is potential GDP in Okunland?

• A) $7,500 billion.
• B) $7,745.6 billion.
• C) $7,752.6 billion.
• D) $8,000 billion.
• E) $8,121.6 billion.

---

Definitions:

Total Output

The complete quantity of goods or services produced in a specific time period by an economy or firm.

Labor Prices

The wages or compensation paid to employees for their labor or work performed.

Profit-maximizing Firm

A company that seeks to achieve the highest possible profit through its operations, focusing on revenue enhancement and cost reduction.

Units of Labor

Refers to the measurement of labor force involvement, typically in terms of person-hours or person-years.