If Okun's Law Is U -

Multiple Choice

If Okun's law is U -
= - 0.5 (Y -
) ,and potential output grows at 2% per year,then a recession that causes output to decrease by one percentage point will cause unemployment to increase by ________.

A) 1 percentage point
B) 1.5 percentage points
C) 2 percentage points
D) 3 percentage points
E) one-half percentage point