Imagine that you are a policymaker trying to decide whether to reduce the rate of inflation. To make an intelligent decision, what would you need to know about inflation, unemployment, and the tradeoff between them?

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28 February, 22:59

Imagine that you are a policymaker trying to decide whether to reduce the rate of inflation. To make an intelligent decision, what would you need to know about inflation, unemployment, and the tradeoff between them?

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Kymani · Answer 1

Answer and Explanation:

Before settling on a choice about lessening the inflation rate in a nation, one must realize that expansion causes an expansion in costs in all sections of economy. Additionally, the swelling rate is significant. Higher inflation rate implies there is much more cash available and the other way around. Joblessness rate in the nation is significant too. Higher joblessness rate implies lower pay rates and the other way around. As per organic market law it implies that there are

A great deal of potential workers available and low interest for them. Hence, they will be offered lower pay rates. From given definitions we can deduct what is the connection among expansion and joblessness rate and will the decline of inflation rate result with positive or negative impact on the joblessness. It is imperative to realize that higher joblessness rate accompanies low expansion rate. For lower joblessness rate, higher swelling rate must be endured.