when there is more inflation. more unemployment
How are the inflation and unemployment rates related?credit card debt
Inflation occurs when the supply of money in circulation exceeds the supply of products that are purchased by that money. The result is more competition for products and more consumers with the means to pay and therefore a higher price of goods.
If unemployment drops to low levels, it generally indicates an elevated money supply (since more people have incomes to spend) and can result in inflation. Consequently, high and/or volitile inflation creates economic uncertainty, which can then result in greater unemployment.
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