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Macroeconomic Analysis Unemployment And Inflation

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DeVry University
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Running head: MACROECONOMIC ANALYSIS 1
Macroeconomic Analysis: Unemployment and Inflation
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MACROECONOMIC ANALYSIS 2
Macroeconomic Analysis: Unemployment and Inflation
Introduction
Unemployment is the state of being of a certain age but neither under a payroll nor under
self-employment although the individual is available for work during the specific reference
period. The rate of unemployment is measured based on the percentage of the unemployed as a
portion of the labor force. Unemployment can be influenced by the fiscal aspect of a country or
through its monetary policy by an authority such as the central bank. When an economy is
associated with high unemployment rates, it means that that economy is inefficient and operating
below its potential standard. The unemployed are unable to purchase goods which results into a
low spending rate. As for inflation it entails the increase in the price level of a particular
economy that influences its sustained decline in the purchasing power of money. Inflation occurs
in an economy when each unit of the involved currency buys fewer goods or services due to the
general increase in prices. This results in the decline of the purchasing power per unit of money
whereby the currency loses its real value.
Gross Domestic Product (GDP) is the sum of market value for the economic activities
conducted within a country during a particular time. When the demand for goods and services
increases, the Philips curve moves upwards which also means that the level of prices increase
thereby increasing the rate of inflation and decreasing the rate of unemployment. The Philips
curve portrays the inverse trade-offs that exists between inflation and unemployment rates. In
this case, the two unemployment-related issues to focus on are; the rates of unemployment
among young college students and unemployment rates by gender. It is important to research and
resolve these issues because they are the primary contributors of the high rates of unemployment

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Running head: MACROECONOMIC ANALYSIS Macroeconomic Analysis: Unemployment and Inflation Name Email Class Professor Date 1 MACROECONOMIC ANALYSIS 2 Macroeconomic Analysis: Unemployment and Inflation Introduction Unemployment is the state of being of a certain age but neither under a payroll nor under self-employment although the individual is available for work during the specific reference period. The rate of unemployment is measured based on the percentage of the unemployed as a portion of the labor force. Unemployment can be influenced by the fiscal aspect of a country or through its monetary policy by an authority such as the central bank. When an economy is associated with high unemployment rates, it means that that economy is inefficient and operating below its potential standard. The unemployed are unable to purchase goods which results into a low spending rate. As for inflation it entails the increase in the price level of a particular economy that influences its sustained decline in the purchasing power of money. Inflation occurs in an economy when each unit of the involved currency buys fewer goods or services due to the general increase in prices. This results in the decline of the purchasing power per unit of money whereby the currency loses its real value. Gross Domestic Product (GDP) is the sum of market value for the economic activities conducted within a country during a particular time. When the demand for goods and services increases, the Philips curve ...
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