The version of Okun's law discussed in class implies that with no change in unemployment, real GDP growth is 3 percent. If the unemployment rate rose by 2 percentage points, Okun's law predicts that real GDP would:   a. decreased by 4 percent   b. decrease by 2 percent   c. increase by 1 percent   d. decrease by 1 percent

If the natural rate of unemployment is 3.9 percent, the current unemployment rate is 7.3 percent, and the current GDP is 10 billion, according to Okun's law, the economy's potential output is: (in billion dollars, rounded to two decimal points).

The figure below depicts the economy of Altrua, which is presently in equilibrium. Enter your responses below rounded to one decimal place. Price level AS AD LAS 340 360 380 400 420 440 460 480 500 520

Recovery won't Improve unemployment Despite some optimism about the seeds of recovery, the Congressional Budget Office (CBO) sees joblessness rising. The CBP sees unemployment peaking at 10.4% next year from an average of 9.3% this year, before it falls to 9.1% in 2011. Source: Fortune, August 25, 2009 Why does unemployment continue to rise as an expansion begins? OA. The unemployment rate is a leading indicator of the business cycle, so unemployment continues to rise as an expansion begins. OB. In the early stages of an expansion, the labor force decreases. OC. In the early stages of an expansion, unemployment increases as firms lay off workers in an attempt to cut costs. D. As an expansion begins, previously marginally attached workers look for jobs, exceeding the number of people hired.