As unemployment decreases, then employment therefore increases. This puts more money in consumers hands, and therefore creates more consumers. As the number of consumers increase, overall business therefore increases. This increases demand, where supply is relatively constant for this short term. An increase in demand for supplies, and a limit to those supplies... makes businesses raises price because they want to increase their profits. Inflation.
Why might inflation acclerate as unemployment rate declines?yes loans
Because as more people get more money, they would buy more stuffs, increasing the demand for various merchandises.
Why might inflation acclerate as unemployment rate declines? loan
Inflation in laymen terms is when too much money chases too few goods. The more people employed, the more spending (presumably) it is anticipated of them. The more inflow of money into already %26quot;static%26quot; (from the goods standpoint) situation with goods, the more likely an increase in inflation. There are many other parameters that can affect this generalization. Today, inflation is caused primarily by resources: oil and natural gas. There is really nothing else to sustain inflation growth. As you see an employement in the resource sector double, that may as well be a subfactor in the more complex inflation increase game...Hope that helps.
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