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AP® Macroeconomics

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Moderate

Okun's Law

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Suppose the natural rate of unemployment is 5 percent, current unemployment is 10 percent and the nominal GDP is $1,000.

According to Okun's law, this economy would have lost

A

$10 in potential output

B

$50 in potential output

C

$100 in potential output

D

$200 in potential output

E

$500 in potential output