How inflation affects unemployment?

Inflation can have a complex relationship with unemployment. In the short term, high inflation can lead to higher unemployment as companies may raise prices to offset the increased costs of goods and services. This can lead consumers to cut back on spending, which can cause businesses to lay off workers. In the long term, however, low inflation can lead to lower unemployment as it can encourage businesses to invest in new projects and hire more workers. Additionally, monetary policy can be used to target a specific inflation rate in order to achieve a low unemployment rate.

The effects of inflation are often not directly felt but are played out over a long time, especially long-term investments are vulnerable to inflation.


At Horizon65, we created a mobile app that enabled you to check the effect of inflation on your savings.

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