The following? time-series plot shows the annual unemployment rate in blue and the annual inflation rate...

The following? time-series plot shows the annual unemployment rate in blue and the annual inflation rate in red over a period of 19 years. Complete parts? (a) through? (d) below.

(b) Estimate the unemployment and inflation rates for year 19

The unemployment rate in year 19 was approximately ___%

The inflation rate in year 19 was approximately ___%

24681012141618012345678xyUnemploymentInflation

Solutions

Expert Solution

The Time Series plot is:

a) Year 5:

Unemployment rate: 7.5%

Inflation rate: 3%

b) Year 19:

Unemployment rate: 5.2%

Inflation rate: 3.6%

c) Misery Index:

Year 5: 10.5%

Year 19: 8.8%

d) We could say the following from the time-series plot:

An increase in the inflation rate seems often to be followed by a decrease in the unemployment rate. Likewise, a decrease in the inflation rate seems often to be followed by an increase in the unemployment rate.An increase in the inflation rate seems often to be followed by a decrease in the unemployment rate. Likewise, a decrease in the inflation rate seems often to be followed by an increase in the unemployment rate.

Answer: A)

orchestra answered 1 year ago

Next > < Previous

Related Solutions

Consider the following time series. (a) Choose the correct time series plot. (i)...

Consider the following time series. (a) Choose the correct time series plot. (i) (ii) (iii) (iv) - Select your answer -Plot (i)Plot (ii)Plot (iii)Plot (iv)Item 1 What type of pattern exists in the data? - Select your answer - Horizontal PatternDownward Trend PatternUpward Trend PatternItem 2 (b) Use simple linear regression analysis to find the parameters for the line that minimizes MSE for this time series. Do...

Assume that the current annual inflation rate in our country is 2.0% and the unemployment rate...

Assume that the current annual inflation rate in our country is 2.0% and the unemployment rate is 4.4%. If you were an advisor of President Trump and Treasury Secretary Steven Mnuchin, and today you were asked to recommend only ONE of the following objectives: lower inflation OR lower unemployment, which would you choose? Explain why you selected one over the other.

a. Which of the following is a correct time series plot for this data?

Consider the following time series data. Week 1 2 3 4 5 6 Value 19 14 17 12 18 14 a. Which of the following is a correct time series plot for this data? Plot 1 Plot 2 Plot 3 What type of pattern exists in the data? Vertical Horizontal Scatter b. Develop the three-week moving average forecasts for this time series. Compute MSE and a forecast for week 7 (to 2 decimals if necessary). MSE The forecast for week...

The natural rate of unemployment is the unemployment rate at which the inflation rate has no...

The natural rate of unemployment is the unemployment rate at which the inflation rate has no tendency to increase or decrease. However, the natural rate of unemployment is not fixed. What causes changes in the natural rate of unemployment? Which of the following will not cause the natural rate of unemployment to change? A. Many previous periods with high rates of unemployment. B. Changes in the money supply resulting from monetary policy. C. Changes in labor market institutions. D. Changes...

Inflation, Unemployment, & Economic Policies (v.v.i) Define – inflation rate, unemployment rate, What are the types...

Inflation, Unemployment, & Economic Policies (v.v.i) Define – inflation rate, unemployment rate, What are the types of employment? Discuss about the natural rate of unemployment What is recession? What are the impacts of recession on business & workers? What happens in a recession and why do recession happens? Aggregate Demand Describe briefly about aggregate demand Describe briefly about aggregate supply What do u mean by demand pull inflation? What do u mean by cost-push inflation?

Please provide one graph that illustrates the annual inflation rate (CPI) and unemployment rate since 2000.

If a Phillips curve shows that unemployment is high and inflation is low in the economy,...

If a Phillips curve shows that unemployment is high and inflation is low in the economy, then that economy: a) is producing at a point where output is less than potential GDP. B) is producing at its potential GDP. C) is producing at a point where output is more than potential GDP. D) is producing at its equilibrium point. Question 21 pts A fiscal policy that increases government spending or cuts taxes is most appropriate when the economy is in:...

(a) Construct a time series plot. (b)Develop the three-week moving average forecasts for this time series.

Consider the following time series data. Week 1 2 3 4 5 6 Value 17 12 14 10 16 13 (a) Construct a time series plot. (b)Develop the three-week moving average forecasts for this time series. (Round your answers to two decimal places.) Week Time Series Value Forecast 1 17 2 12 3 14 4 10 5 16 6 13 Compute MSE. (Round your answer to two decimal places.) MSE = What is the forecast for week 7? (c) Use...

1.) NAIRU is the rate of unemployment consistent with a stable rate of inflation, and it...

1.) NAIRU is the rate of unemployment consistent with a stable rate of inflation, and it is conceptually derived from the Friedman-Phelps Phillips Curve relationship, which shows the relation between inflation and unemployment. Underlying the Phillips Curve relation is the wage-bargaining process. Friedman-Phelps argued that workers start their bargaining position by attempting to get an increase in wages equivalent to expected inflation over the next year (a cost of living adjustment), then additional wage gains are based on how high or...

Why are the inflation rate and unemployment rate moving in the directions that they are? How...

Why are the inflation rate and unemployment rate moving in the directions that they are? How do inflation and unemployment relate to the interest rate? What is the relationship between wage growth and inflation?

Subjects