The following data relate to the percentage unemployment and percentage change in wages over several years. % Unemployment (x) % Change in wages (y) 1.6 5.0 2.2 3.2 2.3 2.7 1.7 2.1 1.6 4.1 2.1. 2.7 2.6 2.9 1.7 4.6 1.5 3.5 1.6 4.4 S.

(a) Calculate the product-moment correlation coefficient between x and y. (Use Ex-18.9, xy-35.2, Ex-37.01, Zy2 132.22, Exy= 64.7) It has been suggested that low unemployment and a low rate of wage inflation cannot exist together.

(b) Without further calculation use your correlation coefficient to explain briefly whether or not you think the suggestion is justified. (L)