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Briefly explain the relationship between unemployment and inflation and which causes the other

      

Briefly explain the relationship between unemployment and inflation and which causes the other.

  

Answers


hildah
Unemployment and inflation are inversely related in that as levels of unemployment decreases inflation increases. Inflation causes unemployment in that when there is general increase in prices of goods and services demand decreases. This may result to decreased sales of the firm hence it may tend to decrease production thus cutting down the number of job opportunities.
Hildah Wafula answered the question on February 27, 2019 at 10:21


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