Some Economists Argue That Okun's Law Overstates the Cost of Cyclical

Multiple Choice

Some economists argue that Okun's Law overstates the cost of cyclical unemployment because

A) the cost of retraining workers must be offset against the loss in output that occurs when workers are unemployed.
B) if efficiency wages prevail, and workers are paid their real wage, already employed workers will reduce their effort, reducing output.
C) it ignores the fact that leisure increases during a recession.
D) it ignores the loss of government revenue and additional government expenditures that occur when unemployment rises.