Macroeconomics 5th Edition by Olivier Blanchard

Exercise 5

As shown by equation (9.2), the estimated Okun's law for the United States is given by
a. What growth rate of output leads to an Increase in the unemployment rate of 1% per year How can the unemployment rate increase even though the growth rate of output is positive
b. Suppose output growth is constant for the next four years. What growth rate would reduce the unemployment rate by 2 percentage points over the next four years
c. How would you expect Okun's law to change if the rate of growth of the labor force was higher by 2 percentage points How do you expect Okun's law to change if the rate of growth of the labor force increases by 2 percent-age points