Our daily necessary products prices are going to increase day by day which makes people’s lives more conflict able and hard to live with family where people have one person for earning, so we need to recover all those issues to get back our financial healthy life.“Inflation has historically had an inverse relationship with unemployment. This means that when inflation rises, unemployment drops. Higher unemployment, on the other hand, equates to lower inflation.” (DePersio) To clarify, prices decrease when unemployment rates rise. For instance, during the COVID-19 pandemic, unemployment was extremely high. People stay at home after losing their employment. The prices of the products were lowered at that time, making them affordable to everyone. However, as of right now, all prices are rising, and the unemployment rate is declining. Following the Pangamic Period, nearly everyone returned to work, but this time around, the cost of goods increased steadily. It follows that unemployment has an upward or downward effect on our lives. People are unable to afford to purchase their necessities as a result. Furthermore, it’s currently taking place not just in the United States but also in other countries. “Another important factor is the increase in market concentration, which has generated greater market power; the current circumstances have provided a prime opportunity for a greater exercise of that market power.” (Konczal et al.) Market concentration refers to a subset of the economy where market shares can vary significantly. A market with less competition is more intensely concentrated. Fragmented markets have very low concentrations, which could impede future economic growth and productivity. This could lead to increased costs, limited consumer options, and reduced innovation and product/service quality. The effects of market dominance are becoming more apparent, and growing market concentration may not necessarily indicate a healthy, competitive market. If focused, it should lead to reduced costs and increased output, while if harmful, it could lead to reduced productivity and higher pricing. “Governments generally try to keep inflation within an optimal range that promotes growth without dramatically reducing the purchasing power of the currency. In the U.S., much of the responsibility for controlling inflation falls on the Federal Open Market Committee (FOMC), a Federal Reserve committee that sets monetary policy to achieve the Fed’s goals of stable prices and maximum employment.” (Kramer) The significance of preserving the ideal range of inflation for economic growth is explained. For the purpose of fostering growth without harming it, governments are essential in controlling inflation. In other words, the government doesn’t lower the rate of price level piece by piece. They adhere to a process or series that keeps economic inflation in check. The goal of the government is to maintain a balance between the population and the economy of the country. FOMC, which manages most of the US inflation. This entails establishing and carrying out monetary policy goals, managing the money supply and interest rates through open market operations, and keeping an eye on and assessing the effects of economic indicators. They prevent adverse impacts on purchasing power that could result in decreased consumer expenditure, unpredictability in corporate planning and investments, wealth redistribution, and income inequality. However, it also promotes investment and spending byconsumers, improves long-term planning and decision-making for businesses, and keeps the financial system stable. Because of this, everyone can have equal economic power, and nothing can be lost.

Work Citation

DePersio, Greg. “What Happens When Inflation and Unemployment Are Positively Correlated?” Investopedia, Investopedia, www.investopedia.com/ask/answers/040715/what-happens-when-inflation-and-unemployment-are-positively-correlated.asp#:~:text=Inflation%20has%20historically%20had%20an,hand%2C%20equates%20to%20lower%20inflation. Accessed 13 Nov. 2023. (DePersio)Konczal, Mike, et al. “The Causes of and Responses to Today’s Inflation.” Roosevelt Institute, 1 Aug. 2023, rooseveltinstitute.org/publications/the-causes-of-and-responses-to-todays-inflation/?gclid=Cj0KCQiAr8eqBhD3ARIsAIe-buNUDYCG15kAC32jYCBJ9ecIY_31UYssBcb5XiMDLMsoo0HS0KmW1EgaAvsLEALw_wcB. (Konczal et al.) Kramer, Leslie. “How Do Governments Fight Inflation?” Investopedia, Investopedia, www.investopedia.com/ask/answers/111314/what-methods-can-government-use-control-inflation.asp. Accessed 13 Nov. 2023. (Kramer)

This entry is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International license.