Final answer:
The relationship between changes in real GDP and the unemployment rate is termed Okun's Law, reflecting an inverse correlation where increased unemployment is associated with lower GDP growth.
Step-by-step explanation:
The statistical relationship between changes in real GDP and changes in the unemployment rate is known as Okun's Law. This law suggests that there is an inverse relationship between GDP growth and unemployment. Specifically, for every 1% increase in unemployment, a country's GDP is expected to be roughly an additional 2% lower than its potential GDP. It's important to note that Okun's Law is not a precise calculation but a rule of thumb that emphasizes the correlation between economic growth and unemployment levels.
While the Phillips Curve does deal with unemployment, it illustrates the trade-off between unemployment and inflation, not GDP. The curve shows that in the short run, there is an inverse relationship between the two: as unemployment decreases, inflation tends to increase, and vice versa. However, this is considered a short-term tradeoff and the Phillips Curve can shift over time.