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From course:

Economics A Level (DONEEEEEEE)

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Question:

What is the Conflict between Unemployment and Inflation

Author: eric_galvao



Answer:

-As Unemployment tanks and the Economy gets to Full Capacity, Demand for Workers [Skilled] Increases. This means Wages will have to Increase and thus Prices may go up as well [Cost Push Inflation] Consumers may also Spend more as Confidence is Up [Job Security] thus more Inflation [Demand Pull] -Reducing Unemployment thus makes it harder to Keep Inflation at 2%


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