The data below shows economic growth rates, unemployment rates and inflation rates for an economy.
| Year | Real GDP growth rate (%) | Unemployment rate (%) | Inflation rate (%) |
|---|---|---|---|
| 2020 | 3.5 | 4.0 | 1.8 |
| 2021 | 2.0 | 5.2 | 4.5 |
| 2022 | 0.5 | 6.5 | 7.2 |
| 2023 | -1.2 | 8.0 | 9.8 |
All other things being equal, which one of the following is the most likely explanation for the relationship between the rates of growth of real output, rates of unemployment and inflation between 2020 and 2023?
A sustained expansion in domestic productive capacity.
A series of supply-side shocks, such as rising global energy and commodity costs.
A sharp contraction in the domestic money supply.
An appreciation in the external value of the national currency.
