Question

what are the effects of unemployment amd inflation on the nation's economy?

Answer 1

As prices for oil, food, materials and other goods and services increase, it affects the entire economy. Increasing rates, known as inflation, impact living costs, business expenses, borrowing capital, mortgages, corporate and government bond yields, and every other facet of the economy. Inflation may be both positive and, in some situations, detrimental for economic recovery. If inflation is too high the economy can suffer; conversely, the economy will prosper if inflation is regulated and at acceptable rates. The jobs increases with regulated, lower inflation. There is more demand for customers to purchase goods and services and the economy profits and develops

According to some economists, regulated inflation, no higher than 6 percent and maybe somewhat lower, may have a beneficial effect on economic growth, whereas inflation at or above 10 percent can have a negative impact. When the US continues to raise its debt and continues to borrow money through Treasury issues, it will have to inflate the currency intentionally in order to ultimately withdraw those obligations. Investors, retirees or those with fixed income savings must eventually pay these commitments off as their securities decline in value as rates increase.

Loss in profits for the jobless. Unemployment is one of the most important causes of deprivation. Long-term unemployment will drive households into debt, and boost relative poverty levels. Possible homelessness. Loss of income will leave people without enough money to cover the costs of housing. Unemployment rises also worsen homelessness rates

Higher national GDP. High unemployment means that the economy runs below maximum potential and is inefficient, resulting in lower production and profits. The unemployed are therefore unable to purchase as many items, so they would lead to lower spending and lower production. An rise in unemployment can have a detrimental effect on multipliers. Rise in social issues. High unemployment areas (particularly youth unemployment) tend to get more crime and vandalism. This may lead to isolation and difficulties in the social integration of young unemployed people.