The Relationship Between Inflation, Unemployment, and Monetary Policy
Inflation, unemployment, and monetary policy are all closely related. Inflation is the rate at which prices for goods and services rise over time. Unemployment is the rate at which people are unable to find work. Monetary policy is the actions taken by a central bank to influence the money supply and interest rates in an economy. All three of these factors have a direct impact on each other and can have a significant effect on an economy.