economics hard Fill in the Blank

According to ___ Law, a 1% increase in the unemployment rate will cause a country's GDP to be roughly 2% lower than its potential GDP.

  1. Population
  2. FEMA
  3. short
  4. Okun's

Answer: Okun's

Arthur Okun's empirical law highlights the severe macroeconomic cost of unemployment. It quantifies the loss in national output resulting from idle labor resources, demonstrating that high unemployment not only causes social distress but also creates a massive negative output gap relative to the economy's full-employment potential.

Topic Macroeconomics - Curves
Exam Relevance UPSC Prelims, SSC CGL
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