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GDP/Employment/Inflation

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How are GDP, unemployment, and inflation as measures of activity related?

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Solution Summary

This 400 word solution discusses how GDP, unemployment and inflation are relates. It situates these concepts in the context of the shifting economic cycle and relates how to stabilize an economy.

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GDP, unemployment and inflation are all key economic issues watched closely by the federal government and they all have impact on each other. All are particluarly in the public eye in America today as we recover (hopefully) from this recession and finally see our GDP numbers on the rise. A low or declining GDP indicates that the economy is not growing, or worse, shrinking. If the GDP is low and not improving, unemployment will be steadily high. If the GDP decreases, as it does in a recession, unemployment will increase. Now, lets look at this using unemployment numbers as the catalyst. Increasing ...

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