what is inflation and a fall in unemployment
There are arguments relating inflation and unemployment. For example, inflation causes real wages to fall without cuts in nominal wages, which are difficult. Therefore it allows more efficient pricing of labor, and less unemployment. Or, falling unemployment allows workers to demand wage increases, which are passed along as price increases and inflation.
4. expansion (recovery) is when output is increasing, unemployment begins to fall and later inflation begins to rise. Unemployment increases during business cycle recessions and decreases during business cycle expansions (recoveries). Inflation decreases during recessions and increases during expansions (recoveries). Review: Maximizing Satisfaction. The primary reason to study unemployment is that it contributes to scarcity.