Question

in your own words, how do unemployment and the economic theory correlate?

Answer 1

Okun's law tell us about relationship between both .according to this law 4% per year gross domestic product (GDP) rate will eliminate unemployment at a rate of 1%.

Keynesian theory of cyclic unemployment , according which unemployment increasing when their is a recession or slowdown generated of business cycle or economy cycle.

According to classical theory unemployment depend upon level or real wages ,if level of real wage is lower than unemployment may rise.