1.4.1 The unemployment rate in Hungary was about 11.2 percent in 2010 and in 2013, the unemployment rate was 10.2 percent.

a. With reference to Okuns Law, by how much would GDP need to increase for the unemployment rate to decrease from the 2010 rate to the 2013 rate?

b. How long does Okuns Law predict it would take for the economy to attain the unemployment rate of 2013 if the annual GDP growth rate of Hungary was 0.8 percent in 2010? How accurate do you think was the prediction?

c. Explain the slippages between the output and unemployment changes that exist in the short run.