What does the Misery Index consist of?

The Misery Index is a straightforward economic indicator that combines two critical factors: the inflation rate and the unemployment rate. This index is designed to provide insight into the economic wellbeing of a population, as both high inflation and high unemployment can lead to financial hardship for individuals and families.

Inflation reflects the rate at which the general level of prices for goods and services is rising, which can erode purchasing power. Meanwhile, the unemployment rate indicates the percentage of the labor force that is without work but actively seeking employment. When both of these rates are high, it signals a period of economic distress, hence creating a "misery index" that captures the overall economic strain on consumers.

By focusing on these two components, the Misery Index effectively quantifies the economic challenges faced by people, making option B the most accurate representation of what the Misery Index consists of. Other combinations, like those involving GDP or interest rates, provide valuable economic insights but do not capture the specific essence of consumer hardship encapsulated by the Misery Index.