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Unemployment and Inflation Two of the biggest issues in macroeconomics are inflation and unemployment. Policymakers would like to keep both of these measures low. Often, however, there is...

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Unemployment and Inflation

Two of the biggest issues in macroeconomics are inflation and unemployment. Policymakers would like to keep both of these measures low. Often, however, there is atradeoffbetween the two. A strong economy that lowers unemployment can put upward pressure on prices. A weak economy that lowers inflation can increase unemployment.

We currently have the benefit of both very low unemployment and inflation. But things could change and it’s good to have policy plans in place before either of these problems gets too bad.

Imagine that you are in charge of macroeconomic policy. Answer these questions, being sure to explain your answers.

  • What are some of the problems, difficulties, or hardships caused by unemployment?
  • What are some of the problems, difficulties, or hardships caused by inflation?
  • If you had to make a choice today between a policy that would head off increases in inflation or increases in unemployment, which one would you choose?
Answered Same Day Aug 22, 2021

Solution

Jose answered on Aug 23 2021
143 Votes
The University of Queensland
1
Economics
2
Name
Student Name
Instructor Code
23/08/20
Student Name
1. What are some of the problems, difficulties, or hardships caused by unemployment?
Most of the researchers considered unemployment as an evil, the major problem related to the unemployment it gives rise to poverty. It will also create mental problems for young people, after a long time of unemployment, for earning money they find illegal ways of earning money and it increases the crime rate in the society. Unemployment also affects the growth level and progress of the country and it increases the financial burden of the government because they have to find additional fund for managing the problems faced by the unemployed people (Sin et al 2019,p.12). Unemployment also...
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