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  • Pub Hon Low

    Member
    January 25, 2022 at 12:50 pm

    As unemployment rates increase, inflation decreases; as unemployment rates decrease, inflation increases.

    Governments can use wage and price controls to fight inflation, but that can cause recession and job losses. Governments can also employ a contractionary monetary policy to fight inflation by reducing the money supply within an economy via decreased bond prices and increased interest rates.