Suppose we are plotting the relationship between the unemployment rate and the growth rate of real GDP.If the unemployment rate is measured along the vertical axis and the growth rate of real GDP is measured along the horizontal axis,we will get a(n)________.
A) horizontal line
B) vertical line
C) upward-sloping curve
D) downward-sloping curve

Question

Quizplus · Accepted Answer

The relationship between the unemployment rate and the growth rate of real GDP is generally a negative (inverse) relationship. As the economy grows, unemployment tends to decrease, and as the economy contracts, unemployment tends to increase. Therefore, we would expect a downward-sloping curve when we plot the unemployment rate against the growth rate of real GDP.

Suppose We Are Plotting the Relationship Between the Unemployment Rate