Which is worse unemployment or inflation?
I believe unemployment is worse because it impairs our health and social relationships yet inflation can cause unemployment. tell me what you think
Answer:
inflation is worse because what is the point of having a job if inflation is so high you cant afford to buy anything with your income?the whole concept that inflation is worse than unemployment relates to the so-called money illusion which is when people think that higher incomes necessarily translate to higher purchasing power without however taking into account the existence of inflation. think about it this way if you have a 10% increase in your income but inflation is 20% your overall purchasing power has been reduced not increased as most would suggest. this is why governments now are increasingly pushing for lower inflation in europe despite increasingly high unemployment.
Unemployment; if I have income, I can find a way to work out the other issues
there are levels of each underwhich a healthy economy can operate. If either get out of range with respect to the others, then you have a more serious problem.
Interesting question. I would say unemployment.
Yet, if we were in a situation of hyperinflation, it wouldn't matter much if you were employed or not. Money would increasingly become worthless.
Genrally, though, unemployment is the bigger issue IMHO.
Unemployment is far worse!
I suffered unemployment for 4 years 1991-95 during the Bush I recession, thanks to old Greenspan's uping the prime rate to lower modest inflation. Millions of others suffered the same thing and lost everything. The inflation measures were meant to protect the savings of the rich or well-off for a few measly percent while ruining millions of little guys
there is a big relation between unemployment and inflation rate, and actually, i think none of them worse than the other,
because it is a cycle, if the inflation rate is high, then wage setters must revise the wages of workers (to protect the purchase power parity) and it will lead an extra cost in production, the increase in cost will give rise to an increase in prices, so demands will be affected by it and as demand dcrease, supply will decrease too and it will lead to unemployment (as output decreases no need for more employed)
and if unemployment rate increases than wages will decrease
and costs of productions will decrase, as costs are decreasing, prices decrease too and inflation rate will decrease...
inflation and unemployment both have negative consequences which affect eachother in long run so in my opinion we cant say this is worse than that
It depends how you want to look at the question.
Assuming a government isn't completely stupid (i.e. has some control over the economy)...
From a personal level, unemployment is worse. You can deal with some inflation by shifting what goods you are purchasing, but are screwed if you have no money at all.
For an economy as a whole, inflation is worse. While unemployment is no good, it can be solved through the control of inflation. Of course, inflation can control unemployment, but it is much easier to deal with inflation as it affects many more things and it is more efficient to let inflation do the controlling. Since inflation is your mechanism of control, having it be out of hand is thus bad news.
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Answer:
inflation is worse because what is the point of having a job if inflation is so high you cant afford to buy anything with your income?the whole concept that inflation is worse than unemployment relates to the so-called money illusion which is when people think that higher incomes necessarily translate to higher purchasing power without however taking into account the existence of inflation. think about it this way if you have a 10% increase in your income but inflation is 20% your overall purchasing power has been reduced not increased as most would suggest. this is why governments now are increasingly pushing for lower inflation in europe despite increasingly high unemployment.
Unemployment; if I have income, I can find a way to work out the other issues
there are levels of each underwhich a healthy economy can operate. If either get out of range with respect to the others, then you have a more serious problem.
Interesting question. I would say unemployment.
Yet, if we were in a situation of hyperinflation, it wouldn't matter much if you were employed or not. Money would increasingly become worthless.
Genrally, though, unemployment is the bigger issue IMHO.
Unemployment is far worse!
I suffered unemployment for 4 years 1991-95 during the Bush I recession, thanks to old Greenspan's uping the prime rate to lower modest inflation. Millions of others suffered the same thing and lost everything. The inflation measures were meant to protect the savings of the rich or well-off for a few measly percent while ruining millions of little guys
there is a big relation between unemployment and inflation rate, and actually, i think none of them worse than the other,
because it is a cycle, if the inflation rate is high, then wage setters must revise the wages of workers (to protect the purchase power parity) and it will lead an extra cost in production, the increase in cost will give rise to an increase in prices, so demands will be affected by it and as demand dcrease, supply will decrease too and it will lead to unemployment (as output decreases no need for more employed)
and if unemployment rate increases than wages will decrease
and costs of productions will decrase, as costs are decreasing, prices decrease too and inflation rate will decrease...
inflation and unemployment both have negative consequences which affect eachother in long run so in my opinion we cant say this is worse than that
It depends how you want to look at the question.
Assuming a government isn't completely stupid (i.e. has some control over the economy)...
From a personal level, unemployment is worse. You can deal with some inflation by shifting what goods you are purchasing, but are screwed if you have no money at all.
For an economy as a whole, inflation is worse. While unemployment is no good, it can be solved through the control of inflation. Of course, inflation can control unemployment, but it is much easier to deal with inflation as it affects many more things and it is more efficient to let inflation do the controlling. Since inflation is your mechanism of control, having it be out of hand is thus bad news.
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