XECO 212 WeeK 5 Discussion Questions (DQ) 2 - 8061

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 Inflation is a term that refers to a rise in the general level of prices of goods and services in an economy over a long period of time. The values of goods and services increase over a period of time, as a result of inflation. The Fisher Effect relates interest rates and inflation. Interest rates and inflation tend to have an inverse relationship. Higher interest rates tend to lower the inflation, whereas lower interest rates result in an increase in inflation. There are different types of unemployment namely, frictional unemployment, seasonal unemployment, structural unemployment, classical unemployment and cyclical unemployment. Frictional Unemployment occurs during the period of job transition. In other words, it explains the unemployment of a person who is in the process of switching jobs. Structural unemployment occurs when a person is not qualified enough to meet the responsibilities of the job. Cyclical unemployment is the result of an economy needing a low workforce. Seasonal unemployment occurs in case of jobs (for example, tourism) which are active only during a particular time of the year. Among the different types of unemployment, structural unemployment has the most impact on the economy. This is because of the nature of structural unemployment, which depends on the structure of an industry. In this case, the person's qualifications are not good enough for an existing job and that would make the task of finding a new job even tougher, which, in turn, would have a negative impact on the economy. 

 

 

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 Inflation is a term that refers to a rise in the general level of prices of goods and services in an economy over a long period of time. The values of goods and services increase over a period of time, as a result of inflation. The Fisher Effect relates interest