Inflation is when prices go up. Unemployment is when people don’t have jobs. Sometimes, fewer people having jobs makes inflation worse, like a pizza shop with not enough chefs making more expensive pizzas.
Examples
- A pizza shop has fewer chefs but still needs to make pizzas for everyone who wants one. The prices go up because each chef is working harder.
- A factory with only a few workers might pay them more so they’ll stay, making the cost of goods higher for customers.
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See also
- Why Do Inflation Rates Go Up When People Are Out of Work?
- What are macroeconomic terms?
- Why Do Inflation and Interest Rates Constantly Fight?
- Why Do Inflation and Interest Rates Constantly Dance Together?
- Why Do Inflation and Interest Rates Fight Like Rivalry Brothers?