1. Okun's law is the ______ relationship between real GDP and the ______. a. negative; unemployment rate b. negative; inflation rate c. positive; unemployment rate d. positive; inflation rate
Okun's law pertains to the relationship between the U.S. economy's unemployment rate and its gross national product (GNP). It states that when unemployment falls by 1%, GNP rises by 3%. Therefore their relationship is negative.
