The Version of Okun's Law Studied in Chapter 10 Assumes

Multiple Choice

The version of Okun's law studied in Chapter 10 assumes that when real GDP grows at 2.88 percent over a year, the unemployment rate does not change. If real GDP instead grows at 1.88 percent over a year, Okun's law predicts that unemployment would:

A) increase by 0.33 percent.
B) decrease by 0.33 percent.
C) decrease by 3 percent.
D) increase by 3 percent.