Draw a scatter diagram of the interest rate and the unemployment ...

[CharlieWard]

Draw a scatter diagram of the interest rate and the unemployment rate. Describe the relationship.
 
  What will be an ideal response?

Question 2

Refer to the Article Summary. The convertible peso (CUC) is worth 25 times the peso (CUP), yet Cuban officials have for years treated the two currencies as being of equal value.
 
  This indicates that the peso (CUP) is ________ compared to the convertible peso (CUC), and would need to be ________ for the two currencies to reach the market equilibrium exchange rate.
  A) overvalued; revalued B) undervalued; devalued
  C) overvalued; devalued D) undervalued; revalued

[briezy]

Answer to Question 1

To make a scatter diagram of the interest rate and the unemployment rate, plot the interest rate on the x-axis and the unemployment rate on the y-axis. The graph will be a set of dots and is shown in Figure A1.6 . The pattern made by the dots tells us that when the interest rate increases, the unemployment rate usually decreases so there is a negative relationship.

Answer to Question 2

C

[CharlieWard]

TYSM

[patma1981]

Excellent