Inflation and Unemployment: Economic Impacts and Consumer Purchasing Power

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Economics - Macroeconomics

michael1tekrzp Created by 10 mon ago

Cards in this deck(8)

When people in the economy spend way more money than the products being produced, it leads to _____ inflation.

When producers raise prices to maintain a steady level to afford high-cost materials, it is known as _____ inflation.

Unemployment affects the economy by threatening security and well-being, causing the nation to lose goods and services, and reducing business sales because the unemployed cannot buy as many products. This describes the impact of _____ on the economy.

As the value of the dollar falls, the purchasing power of people on fixed incomes decreases. This phenomenon is known as decreased _____ power.

When wages tend to stay ahead of or at the pace of inflation, it results in a decreased value of real _____.

As prices increase, interest rates also increase, leading to decreased consumer spending. This is an effect of increased _____ rates.

When the inflation rate runs higher than the interest earned on savings, it results in decreased _____ and investing.

High inflation rates increase production costs for businesses, leading to potential consumer refusal to pay higher prices. This is known as increased _____ costs.

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Inflation and Unemployment: Economic Impacts and Consumer Purchasing Power

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