Negative Correlation Between Central Bank Independence and Inflation (OECD, 1962-1990) [Figure E5.1]
The scatter plot in Figure E5.1 illustrates a clear negative correlation between the degree of central bank independence in the mid-1980s and the average inflation rate from 1962 to 1990 for a sample of OECD countries. The plot shows that nations with more independent central banks, such as Germany and Switzerland, tended to have lower inflation, while countries with less independent central banks, like Portugal and Greece, experienced higher inflation.
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Introduction to Macroeconomics Course
Ch.5 Macroeconomic policy: Inflation and unemployment - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
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A city analyst observes that neighborhoods with a higher number of public libraries also report, on average, a higher median household income. Based solely on this observed statistical association, which of the following is the most accurate conclusion?
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An automotive industry analyst observes that as the age of a specific model of car increases, its average resale value consistently decreases. This statistical relationship, where an increase in one variable is associated with a decrease in another, is described as a ______ correlation.
A researcher studying elementary school children finds a strong positive statistical association between their shoe size and their scores on a standardized reading test. As shoe size increases, reading scores tend to be higher. Which of the following statements provides the most logical analysis of this finding?
Correlation Coefficient
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Figure 5.1: Inflation and US Presidential Election Outcomes (1912–2020)
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Negative Correlation Between Central Bank Independence and Inflation (OECD, 1962-1990) [Figure E5.1]
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Negative Correlation Between Central Bank Independence and Inflation (OECD, 1962-1990) [Figure E5.1]
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Bank of England Granted Operational Independence (1997)
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Learn After
Interpreting Economic Data: Correlation and Causation
A study of a group of developed countries examined the relationship between two variables from 1962 to 1990. One variable was an index measuring the degree of a central bank's independence from government control (where a higher score means more independence). The other variable was the country's average annual inflation rate. A scatter plot of the data showed a distinct pattern: countries with high scores on the independence index consistently clustered around low average inflation rates, while countries with low scores on the independence index were associated with high average inflation rates. Based only on this described pattern, what is the most accurate conclusion?
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A study of developed countries from 1962-1990 found a strong negative correlation, meaning that as a central bank's independence from political influence increased, the country's average inflation rate tended to decrease. This finding proves that granting a central bank more independence is a guaranteed method to lower a country's inflation rate.
Interpreting Economic Data on Inflation
A study of developed countries from 1962-1990 showed a strong negative correlation between the degree of central bank independence and the average inflation rate. Imagine a hypothetical country, 'Econland,' was part of this study. Econland had a very high degree of central bank independence but also experienced a moderately high average inflation rate, making it an outlier that does not fit the general trend. What is the most reasonable conclusion to draw from Econland's data?
A study of developed countries from 1962-1990 examined the relationship between an index of central bank independence and the average inflation rate. Match each item to the description that best fits the findings of this study.
Policy Debate on Central Bank Independence
A study of developed economies from 1962 to 1990 observed a clear negative correlation, indicating that as a central bank's independence from political influence increased, the country's average inflation rate tended to ____.
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