Author Question: According to Okun's Law, for each 1 percentage point that the unemployment rate is above the natural ... (Read 106 times)

SGallaher96 · **on:** Jun 29, 2018

According to Okun's Law, for each 1 percentage point that the unemployment rate is above the natural unemployment rate, then

A) the inflation rate is greater than the expected inflation rate by 2 percentage points.
B) real GDP is above potential GDP by 2 percent.
C) real GDP is below potential GDP by 2 percent.
D) the real interest rate is below the natural real interest rate by 1 percentage point.
E) the inflation rate is less than the expected inflation rate by 1 percentage point.

Question 2

The figure above shows the loanable funds market. The equilibrium real interest rate is ________ percent, and the equilibrium quantity of loanable funds is ________.

A) 4; 1.4 trillion
B) 6; 1.6 trillion
C) 4; 1.8 trillion
D) 8; 1.8 trillion
E) 8; 1.4 trillion