I had to graph both the U.S. inflation and unemployment rates on the same graph between the years 1990-2004.
I need to analyze the data. How are the two rates related? How does one affect the other, if so?
One way to analyze the data is to put the inflation data on one axis, say the x-axis, and the unemployment data on the y-axis. You might need to determine some scale to make the presentation usable. If you have 15 data points for each year, then find the range for each set: Subtract the smallest value from the largest. If you do this on a spreadsheet, it'll automatically scale the data. From this plot you should be able to see if there's some kind of direct or inverse relationship between the data. Are they linearly related?
After reviewing my post I'm not sure I was clear on what to do here. If you make a collection of ordered pairs for the data as (inflation, unemployment), then order the data by inflation and plot it you can determine how they might be related. This would be an x-y scatter plot, except that the data would be ordered to see if there's some kind of functinal relationship.
If you look at plots where the data are plotted separately as functions of time, relations between them may not be apparent.
To analyze the relationship between the U.S. inflation and unemployment rates, you can create a scatter plot. Here are the steps:
1. Collect the inflation and unemployment data for each year between 1990 and 2004.
2. Organize the data into ordered pairs, where the x-coordinate represents the inflation rate and the y-coordinate represents the unemployment rate for each year.
3. Order the ordered pairs based on the inflation rate.
4. Plot the ordered pairs on a scatter plot, with the x-axis representing the inflation rate and the y-axis representing the unemployment rate.
5. Take note of the pattern or trend in the scatter plot. Look for any obvious relationship between the two rates.
By analyzing the scatter plot, you can determine how the two rates are related. If there is a clear pattern where the points tend to cluster together or form a line, it suggests a relationship between the two variables.
For example, if the points on the scatter plot tend to form an upward sloping line, it indicates a positive correlation, meaning that as the inflation rate increases, the unemployment rate also tends to increase. On the other hand, if the points form a downward sloping line, it indicates a negative correlation, meaning that as the inflation rate increases, the unemployment rate tends to decrease.
However, if there is no discernible pattern or the points are scattered randomly, it suggests that there may not be a strong relationship between the two variables.
Remember, correlation does not imply causation. While the scatter plot can provide insights into how the two rates are related, further analysis and examination of other economic factors are needed to determine the cause-and-effect relationship between inflation and unemployment.