Unemployment and Inflation
Two of the biggest issues in macroeconomics are inflation and
unemployment. Policymakers would like to keep both of these
measures low. Often, however, there is a tradeoff between the two.
A strong economy that lowers unemployment can put upward pressure
on prices. A weak economy that lowers inflation can increase
unemployment.
We currently have the benefit of both very low unemployment and
inflation. But things could change and it’s good to have policy
plans in place before...