A common belief is that unemployment is functional for society because it reduces inflationary pressures.

Question

Quizplus · Accepted Answer

Unemployment can be functional for society in that it can help control inflation. When there are fewer people employed, there is less disposable income circulating, which can reduce demand for goods and services, thereby helping to control price increases. This concept is often discussed in the context of the Phillips Curve, which suggests an inverse relationship between unemployment and inflation.

A Common Belief Is That Unemployment Is Functional for Society