research

Relationship between Inflation and Unemployment

Submitted
By
Anum khan

Daniya Sohail (5897)
To
Department of Business Administration

In partial fulfillment of The requirement for the
Course of
MACROECONOMICS

Accepted by the faculty

FACULTY OF BUSINESS ADMINISTRATION

Mr. Tehseen Jawaid
Advisor

Table of Contents

INTRODUCTION
Abstract 2
Introduction 3
REVIEW OF RELATED LITERATURE
2.1 Theoretical background 6
METHODOLOGY
Methodology 9
DATA ANALYSIS
Data analysis 10
Bibliography

Abstract This research was conducted to study the effects of inflation and unemployment in the economy of Pakistan. The variables are inflation and unemployment. The data was taken from 1991 to 2010. The result shows that there is a strong negative correlation between inflation and unemployment. That the inflation and unemployment cannot control at the same time and in the country like Pakistan, these two factors are the major cause of instability of the economy and causes high economic and financial loses of the country.

Chapter # 1
Introduction
Inflation and unemployment are the two big problems of macroeconomics and are two intricately linked economic concepts. Over the years there have been a number of economists trying to interpret the relationship between the concepts of inflation and unemployment. There are two possible explanations of this relationship, one in the short term and another in the long term. In the short term there is an inverse correlation between the two. As per this relation, when the unemployment is on the higher side, inflation is on the lower side and the inverse is true as well.
The problem of unemployment and inflation has broken out in all the corners of the world, including Pakistan. Following the past few decades, Pakistan has followed a sharp rise in inflation and unemployment which has destabilized the economy.
The

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