The version of Okun's law discussed in class implies that with no change in unemployment, real GDP growth is 3 percent. If the unemployment rate rose by 2 percentage points, Okun's law predicts that real GDP would: increase by 1 percent decrease by 4 percent
The version of Okun's law discussed in class implies that with no change in unemployment, real GDP growth is 3 percent. If the unemployment rate rose by 2 percentage points, Okun's law predicts that real GDP would: increase by 1 percent decrease by 4 percent
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Pleasehighlight which of the choices is the correct answer for each and if you can please explian why
![The version of Okun's law discussed in class implies that with no change in unemployment,
real GDP growth is 3 percent. If the unemployment rate rose by 2 percentage points, Okun's
law predicts that real GDP would:
increase by 1 percent
decrease by 4 percent
decrease by 2 percent
decrease by 1 percent](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2e68f9cd-bde5-4bf0-be95-86dc6cd14d49%2F74bbf39d-73e7-4334-88aa-541162b326a3%2Fa38d92n_processed.png&w=3840&q=75)
Transcribed Image Text:The version of Okun's law discussed in class implies that with no change in unemployment,
real GDP growth is 3 percent. If the unemployment rate rose by 2 percentage points, Okun's
law predicts that real GDP would:
increase by 1 percent
decrease by 4 percent
decrease by 2 percent
decrease by 1 percent
![Because the long-run aggregate supply curve is vertical, changes in aggregate demand (in the
long-run) affect
both prices and the level of output
neither prices nor the level of output
level of output but not prices
prices but not level of output](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2e68f9cd-bde5-4bf0-be95-86dc6cd14d49%2F74bbf39d-73e7-4334-88aa-541162b326a3%2Fpfs7g_processed.png&w=3840&q=75)
Transcribed Image Text:Because the long-run aggregate supply curve is vertical, changes in aggregate demand (in the
long-run) affect
both prices and the level of output
neither prices nor the level of output
level of output but not prices
prices but not level of output
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