We use cookies to personalise content and advertisements and to analyse access to our website. Furthermore, our partners for online advertising receive pseudonymised information about your use of our website. cookie policy and privacy policy.

According to Okun's law, if the unemployment rate goes from 6% to 2%. what will be the effect on the GDP?


A. It will decrease by 11%


B. It will increase by 5%


C. It will increase by 11%


D. it will decrease by 5%

 Feb 19, 2019

Never heard of this but....the law says that : In the short run, the unemployment rate decreases about 1 percentage point for every 3 percent increase in real GDP


So....it seems that if the unemployment rate decreases by 4 %.....then the GDP should rise by 4(3%) = 12%


So....I suppose  that "C"  comes closest



cool cool cool

 Feb 19, 2019

18 Online Users