Positive correlation between inflation and interest rates

Steps:

• Rank inflation: W (1.4 lowest), Y/Z (2.1), X (3.7 highest).
• Align interest rates: W (3.4), Y/Z (6.0), X (8.7)—rising in tandem.
• Confirm no counterexamples in the data for this pair.
• Test other options: B and D fail pattern checks; C holds narrowly but not broadly.

Why A is correct:

• Data shows higher inflation pairs with higher interest rates, per the Fisher effect (nominal rate ≈ real rate + inflation).

Why the others are wrong:

• B: Country X's high inflation (3.7%) links to high unemployment (12.3%), not low.
• C: True only for extremes (W), but ignores consistent trend across all countries.
• D: Lowest unemployment (Y/Z at 7.7%) ties to 2.1% inflation, not the lowest (W at 1.4%).

Final answer: A