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A rise in unemployment will lead to a fall in inflation...this is best explained by the philips curve

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13y ago

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Does growth and development happen at the same time?

Yes, because it response to the development and it happen at the same time bacause of the theory that happen in particular time!


What was inflation in the late 1800s?

The same as it is today - a rise in the price of goods and services over time.


How does inflation impact the value of money?

Inflation reduces the purchasing power of money over time, meaning that the same amount of money can buy fewer goods and services.


Will unemployment increase or decrease?

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Why was it so difficult to find an effective solution to inflation problems between 1964 and 1983?

It is due to the nature of economic policy. Normally inflation and unemployment are inversely related, so policy decisions can be made to cure one at the expense of the other (for instance, raising of interest rates lowers inflation but risks stifling business growth). During the period between 1964 and 1983, we experienced "stagflation" (high unemployment AND high inflation). So when we experience both at the same time, policy makers have their hands tied as to what to do. If they decide to try to get inflation lower, they risk making unemployment worse (and it's already bad) and if they try to get employment lower, they risk making inflation worse.


How is inflation compounded over time?

Inflation is compounded over time because as prices increase, the purchasing power of money decreases. This means that the same amount of money will buy less goods and services in the future than it does today.


How is the inflation rate calculated?

The inflation rate is calculated by comparing the current prices of a basket of goods and services to the prices of the same basket in a previous period. This comparison is used to determine the percentage increase in prices over time, which represents the inflation rate.


What might happen to aggregate supply curve if there was a significant increase in the cost of foreign oil?

The aggregate supply curve shifts to the left as the price of key inputs rises, making a combination of lower output, higher unemployment, and higher inflation possible. When an economy experiences stagnant growth and high inflation at the same time it is referred to as stagflation.


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18?

Place of employment worksite


Sentence with the word inflation?

"The Rate of inflation is at an all time low!"