IMAT 2013 Q29 [Economy]

Past Papers Solutions Archives
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1

The table below shows the consumer price inflation and unemployment rate for 5 countries:

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A newspaper comparing March to February reported that:

‘Unemployment has fallen but there has been a rise in the inflation rate’

Which country is the statement referring to?

A. Japan
B. UK
C. France
D. United States
E. Germany

2

Simple steps to solve word problems:

  • Underline key information
  • Determine what they are trying to ask, and what you will need to solve it
    • Eliminate any non-essential information
  • Draw a picture, graph, or equation
    • In moments of high stress like exam taking, always work with the paper they give you to avoid careless mistakes.
  • Solve.

This is a very basic question than can be solved in two steps. First, we will find all countries that have a decrease in unemployment. Then, out of these countries, we will find the option that also has an increase in inflammation.

Note: The table is backwards here. Notice that March is the first column instead of February? This is why we need to be extra careful because this question almost seemed too straightforward to begin with. There is often a subtlety.

  1. Which countries have a decrease in unemployment from February to March

United States: Decrease

Japan: No change

Germany: Decrease

France: No change

UK: Decrease

After Step 1 we can eliminate Japan and France as their unemployment rate did not decrease.

  1. Which countries have an increase in inflation from February to March.

United States: Increase

Japan: Already Eliminated From Step 1

Germany: No change

France: Already Eliminated From Step 1

UK: Decrease

The United States is the only one with an increase in inflation and a decrease in unemployment.

\fcolorbox{red}{grey!30}{Therefore D is the correct answer.}