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Unemployment and Inflation - Essay Example

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The essay "Unemployment and Inflation" aims to analyze the meaning of a full employment, international comparisons of the unemployment, inflation and interest rate. Full employment is the level of employment whereby there is an increase in demand and all who are willing to have the chance to do so…
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Unemployment and Inflation
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Download file to see previous pages Other countries experience a large number of immigrants that other countries are hence causing this difference. Some countries have rigid protective labor legislation. This has made the employment rate to grow slowly in other industrial countries than other countries. Other countries have small or lack the land to do farming while other states do this business hence increasing the employment rate. The presence of different rules and regulation and different resource in this industrial countries contributes to the difference in the employment rates. 3.Inflation and interest rate Inflation causes the increase in the price of buying goods. Inflation is good for investment since it increases the price of the current investment hence making profits from it. Inflation is good for one who has invested and is selling it, but it is expensive for the buyer. The possibility of inflation rate typically increases the interest rate for borrowers the loans. The creditors are the ones who will get the benefits of it since they will increase the interest rate hence getting more money that they can invest in the future. On the other hand, the borrowers will accept to take the loan with the high-interest rate simply because of the future inflation. The borrowers will be willing to pay a higher interest for them to invest and gain more when the inflation comes. At the end of it, the creditors will gain, the increased interest at that time will the borrowers will get more money in the future since the value of the investment will be higher. ...Download file to see next pagesRead More
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