The paper "Analysis Of The Rate Of Unemployment As Related To Inflation Rate" gives detailed information about a historical inverse relationship between the rate of unemployment and the rate of inflation in an economy. This means that lower unemployment is correlated with a higher inflation rate…
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Low standard errors help to infer that the sample drawn for estimating is truly representative of the population and gives a power to the statistical inference to a study (Vassilis, 2008).If there is no significant difference between the standard errors of the two samples we can consider that they belong to the same population or in the other way the test results are same with respect to a particular parameter. This curve is a historical inverse relationship between the rate of unemployment and the rate of inflation in an economy. This means that lower unemployment in an economy is correlated with a higher inflation rate. When high levels of both inflation and unemployment also take place then it is called stagflation and violates the principle of the forecast of the curve. To consider this anomaly various modifications of this curve has taken place. For example, New Kenysian “Dynamic Stochastic General Equilibrium” models based on macroeconomics has been developed with sticky prices it is reflected that there is a positive relationship between the rate of inflation and the level of demand and thus a negative relation between the rate of inflation and rate of employment occurs. In the context of this article, we concentrate on the money wage Phillips curve given by the equation gW= gWT – f(U) where g is the equivalent of the percentage rate of growth of the variable, W is the money wage rate and signifies the total money wage costs per production employee, which includes the benefits and the payroll taxes. Hence the focus is on the production workers money wages as these costs are crucial to a firm for making financial decisions. The equation tells us that the growth of money wages rises with the trend in growth of the money wages (T) and falls with the unemployment rate(U). The function (f) is assumed to monotonically increase with U so the dampening of money- wage increases by unemployment is reflected by the negative sign.
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“Analysis Of The Rate Of Unemployment As Related To Inflation Rate Essay”, n.d. https://studentshare.org/macro-microeconomics/1625374-any-topic-that-deals-with-economy.
This is in terms of the quality of life led by the citizens. Some critics however have found that the use of national income data is not 100 percent reliable indicator of standard of life (Miller, 2011). The business cycles in an economy would influence standard of living.
What part does the economic downturn of the last three years play in this area, and what factor does industry have to do with joblessness? Or is it simply the normal economic adjustments occasionally required from a capitalitisic society? Also we will look at what part the nation’s defense plays in the budget and whether defense spending affects the United States.
Therefore, the contractor’s quote is justified. In addition to the above, the wage rate should also be broken down into the amount which is paid as bonus to the employees for doing overtime work. In addition to the above, it is also of prime importance that the company evaluates the ‘Fixed and Variable Factory Overheads’ expended on the project so that when the price is quoted to the Government, the company does not suffer any loss on account of the project.
It is shown in the paper that the concepts of economic growth, inflation and unemployment are associated with each other and influence each other as well. In any country, government wants the economic growth to be quick, on the other hand it is desired that the rates of unemployment were low along with rates of inflation within normal range.
Oil prices are determined by the help of other countries especially Latin America and Europe. Therefore oil prices in these countries affect Bahrain’s economy. Inflation in Bahrain is affected by goods such as food, beverages, tobacco and services such as medical car, transport and communication.
Inflation entails an increase in the prices of basic commodities within a specified period of time.Growth rates indicate the size of the economy as a result government strategies such as creation of employment, increasing the level of investment, maintaining minimum wage, reducing interest rates and creating competition among other policies.
The study will also cover the overall impact on the economy and the way things change in the economy as a result of an undue rise in inflation, while emphasizing the results of such a change in the economy. The purview of it covers the effects created by unreasonably high inflation and also the total effects of such effects on the economy.