Economists have observed that as an economy grows the unemployment rate tends to

ID: 1093499 • Letter: E

Question

Economists have observed that as an economy grows the unemployment rate tends to fall. Which statement is most likely to be correct?

a) Economic growth and the unemployment rate are positively correlated.

b) Increased economic growth causes a decline in the unemployment rate.

c) A decreasing unemployment rate causes economic growth.

d) This is likely to be a spurious relationship and there is no real relationship between economic growth and the unemployment rate.

a) Economic growth and the unemployment rate are positively correlated.

b) Increased economic growth causes a decline in the unemployment rate.

c) A decreasing unemployment rate causes economic growth.

d) This is likely to be a spurious relationship and there is no real relationship between economic growth and the unemployment rate.

b) Increased economic growth causes a decline in the unemployment rate.

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