Economics 0455 · IGCSE · The macroeconomic aims of government

The macroeconomic aims of government — practice question

The table presents data on three economic indicators for four countries. country W: inflation $1.4\%$, interest rates $3.4\%$, unemployment $10.2\%$ country X: inflation $3.7\%$, interest rates $8.7\%$, unemployment $12.3\%$ country Y: inflation $3.6\%$, interest rates $7.3\%$, unemployment $14.2\%$ country Z: inflation $2.1\%$, interest rates $6.0\%$, unemployment $7.7\%$ What conclusion may be drawn from this information?

  • ACountries with higher inflation have higher interest rates.
  • BCountries with higher interest rates have lower unemployment.
  • CThe country with the lowest inflation had the highest unemployment.
  • DThe country with the lowest unemployment had the lowest inflation.

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