Suppose an Economy's Natural Rate of Unemployment Is 5 Percent $\tilde { Y }$

question 58

Multiple Choice

Suppose an economy's natural rate of unemployment is 5 percent. If the unemployment rate is 3 percent, according to Okun's law, $\tilde { Y }$ is:

• A) 2 percent
• B) -4 percent
• C) 4 percent
• D) -2 percent
• E) Not enough information is given.

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Definitions:

Working Memory

A mental system tasked with briefly maintaining information for processing, crucial for reasoning, directing decision-making, and influencing behavior.

Storing

The action of preserving or keeping information, items, or substances in a particular location for future use.

Manipulating

Handling or controlling something in a skilled manner, often with the connotation of unfairness or deceit.

Encoding

The process by which information is transformed into a format that can be stored in memory, an initial step in creating a new memory.