Inflation and unemployment major concerns from "summary" of EBOOK: Macroeconomics by Rudiger Dornbusch,Stanley Fischer,Richard Startz
Inflation and unemployment are two major concerns in the field of macroeconomics. Inflation refers to the general increase in prices of goods and services in an economy over a period of time. This can erode the purchasing power of consumers, leading to a decrease in their standard of living. On the other hand, unemployment refers to the situation where people who are willing and able to work are unable to find jobs. This can have negative effects on individuals, families, and the economy as a whole. The relationship between inflation and unemployment is known as the Phillips curve. According to this theory, there is an inverse relationship between the two variables. That is, when inflation is high, unemployment tends to be low, and vice versa. This trade-off has important implications for policymakers, as they have to strike a balance between controlling inflation and reducing unemployment. One of the ...
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