Question

According to Okun's law, if the unemployment rate goes from 7% to 4%, what

Answer 1

Answer:

The correct answer is B. According to Okun's law, if the unemployment rate goes from 7% to 4%, the GDP will increase by 3%.

Step-by-step explanation:

Okun's Law establishes a direct relationship between unemployment and the production of a nation. Thus, the higher the unemployment, the lower the production, and on the contrary, the more the unemployment falls, the inversely proportional will be the increase in the country's production.

Thus, if the unemployment rate falls from 7% to 4%, that is, it decreases by 3%, the country's GDP will increase by 3%.