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Economic Growth, Unemployment and Inflation Relations

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The link between the level of employment and economic growth

Because there is a significant correlation between employment and economic growth,

economic growth is a measure of increasing employee productivity. When the economy's rate is

high, it signifies that many activities are taking place in the country, such as manufacturing,

transportation, and the production of legal materials, creating a demand for labor. Slow economic

growth indicates that there are few activities taking place across the country, resulting in a low

need for workers. As a result, a high level of employment indicates that economic growth is

strong. For example, during the COVID-12, when activity paused, economic growth slowed, and

job levels fell. If productivity can be converted to employment, it can be used as a gauge of the

economy as a whole.

The relationship between inflation and a country's economic growth

Inflation is defined as an increase in the cost of goods and services in a particular

currency. When inflation occurs, the economy suffers from a high rate of decline or stagnation

because consumers spend more than they earn, decreasing investment. When an economy is

saturated with high money circulation, products prices would probably rise, causing the economy

to produce at a high cost, causing the economy's overall operation to deteriorate. With a rapidly

growing economy, inflation may occur throughout the currency stabilization process, causing

product prices to rise due to upward pressure on the cost of living and wages. Although

manufacturers may be able to make more money, common people are more likely to experience

slow development due to high costs. For example, if the price of oil rises to $100 from $75, the

cost of inputs rises, and the cost of transportation rises for everyone.

Unemployment's Effects
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Unemployment, it can be argued, provides high-quality jobs and promotes economic

efficiency. Because the workforce is high, high-quality individuals can be found in the process of

sourcing and recruiting high-quality individuals who will offer high-quality work and will try to

keep quality work worried that any mistake could cost them their job, as opposed to an

environment where unemployment is low

Unemployment, on the other hand, can produce an economic downturn since it reduces

consumer power. As a result, even after production, no one will be able to consume because the

spenders would be unable to make purchases due to a lack of income.

Unscheduled Inflation

Unscheduled inflation produces a situation in which employees are paid or work on shifts

that are not constant, causing salary redistribution amongst families. Because of the uncertainty

that comes with planned inflation and the labor force, this limits planning to the short term.

Unemployment, for example, is a source of tension in families.

On the other hand, the scheduling information may result in over-employment of some

individuals who are the only persons with specific expertise in the production process, resulting

in family conflict due to the need for additional hours and willingness to share off. These can be

used to assess the effectiveness of government policies and other government entities.
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References

Meteb, A. M. (2017). Unemployment and economic growth in Saudi Arabia 2000-2015.

International Journal of Economics and Finance, 9(9), 83-93.

Mishchenko, V., Naumenkova, S., Mishchenko, S., & Ivanov, V. (2018). Inflation and economic

growth: The search for a compromise for the Central Bank's monetary policy. Banks &

bank systems, (13, Iss. 2), 153-163.