The accompanying table provides data from Canada on the average annual rates of unemployment and inflation rate.

Question:

The accompanying table provides data from Canada on the average annual rates of unemployment and inflation rate. Use the numbers to construct a scatter plot similar to Figure 16-5. Discuss why, in the short run, the unemployment rate rises when inflation falls.

Year Unemployment rate Inflation rate 2006 6.3% 2.2% 2007 6.0 2.2 2.3 2008 6.1 2009 8.3 0.3 2010 8.1 1.8 2011 7.5 2.9 7.