The Version of Okun's Law Studied in Chapter 2 Assumes

question 105

Multiple Choice

The version of Okun's law studied in Chapter 2 assumes that with no change in unemployment,real GDP normally grows by about 4 percent over a year.If the unemployment rate rose by 1 percent over a time period too brief for normal growth to occur,Okun's law would predict the corresponding change in real GDP to be a:

• A) rise of about 0.5 percent.
• B) rise of about 2 percent.
• C) fall of about 2 percent.
• D) fall of about 0.5 percent.

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Definitions:

Allergy

A condition in which the immune system reacts abnormally to a foreign substance.

Interstitial Fluid

Fluid found between tissue cells that is absorbed by lymphatic capillaries to become lymph.

Viral Infection

An illness caused by viruses, microscopic infectious agents that replicate inside living cells of organisms.

Saliva

A watery fluid secreted into the mouth by glands, providing lubrication for chewing and swallowing, and aiding in digestion.