Question

Assume that the equation for predicting the rate of inflation from the percent of unemployed workers is as follows: .90(X) + 11
If the unemployment rate equals 10 percent, the inflation rate should equal

Answer 1

We have an equation for predicting the rate of inflation from the percent of unemployment workers: $0.9 \cdot x + 11$. So, if we know that the unemployment rate equals 10 percent, then the inflation rate should equal $0.9 \cdot 10 + 11 = 9 + 10 = 20\%$.

Answer: 20%.