Question

Unemployment and Inflation in Spain

Complete the following. Write your answers in the green spaces. When you are finished, save your work and upload it to the appropriate folder in the Assignments section of D2L.

Let’s look at unemployment and inflation in the Spanish economy during the 1990s. We can extract the following data from the OECD (Organization for Economic Cooperation and Development), which maintains a database of economic data for select industrialized countries:

Fill in the blanks in the table using the formulas from the assigned reading (a bit of algebra is required):

	CPI	Rate of Inflation	Labor Force	Employment	Unemployment	Rate of Unemployment
Date	Index number	Percentage	Persons, Thousands	Persons, Thousands	Persons, Thousands	Percentage
1990	51.87	6.72	15378.80		2509.30	16.32
1991	54.95		15515.00	12970.40	2544.70	16.40
1992	58.21	5.92	15613.30	12730.60	2882.70
1993	60.87	4.57	15794.40	12197.30		22.78
1994	63.74	4.72	16048.70	12169.50	3879.20
1995		4.67	16175.70	12461.10	3714.60	22.96
1996	69.09	3.56		12811.55	3645.05	22.15
1997	70.46		16749.13	13286.45	3462.68	20.67
1998	71.75		17013.56	13837.87	3175.69
1999	73.41	2.31	17425.75	14689.83	2735.93	15.71

Answer these questions:

Describe the trend in prices in Spain during the 1990s.

Describe the trend in unemployment in Spain during the 1990s.

Do you see a correlation between the unemployment rate and the inflation rate in the data?