Solution Found!
Unemployment and Inflation The following time-series plot
Chapter 2, Problem 11E(choose chapter or problem)
Unemployment and Inflation The following time-series plot shows the annual unemployment and inflation rates for the years 1988 through 2009.
(a) Estimate the unemployment and inflation rates for 1992.
(b) Estimate the unemployment and inflation rates for 2009.
(c) The misery index is defined as the sum of the unemployment rate and the inflation rate. Use your results from (a) and (b) to estimate the misery index for the years 1992 and 2009.
(d) Describe any relationship that might exist between the unemployment rate and inflation rate over the time period shown.
Questions & Answers
QUESTION:
Unemployment and Inflation The following time-series plot shows the annual unemployment and inflation rates for the years 1988 through 2009.
(a) Estimate the unemployment and inflation rates for 1992.
(b) Estimate the unemployment and inflation rates for 2009.
(c) The misery index is defined as the sum of the unemployment rate and the inflation rate. Use your results from (a) and (b) to estimate the misery index for the years 1992 and 2009.
(d) Describe any relationship that might exist between the unemployment rate and inflation rate over the time period shown.
ANSWER:Solution
Step 1 of 4
a) We have to estimate the unemployment and inflation rates for 1992
In the year 1992 the unemployment rate is 7.5%
In the year 1992 the inflation rate is 3%