Economics 9708 · AS & A Level · Market failure

Market failure — practice question

The table presents the yearly inflation rate (consumer prices) and the yearly unemployment rate for five countries in a recent year. What conclusion may be drawn about the connection between inflation and unemployment?

  • AHigher inflation is always correlated with higher unemployment.
  • BHigher inflation is always correlated with lower unemployment.
  • CLower inflation is always correlated with higher unemployment.
  • DNo consistent correlation can be established.

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