Low unemployment rates can lead to higher inflation.

Name: Low unemployment rates can lead to higher inflation.
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Question

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When unemployment rates are low, demand for goods and services tends to increase, leading to a rise in prices. This is because employers have to compete for a smaller pool of available workers, which can lead to wage increases, and they may also have to pay more for raw materials and other inputs. As a result, low unemployment can contribute to inflationary pressure in the economy.

Low Unemployment Rates Can Lead to Higher Inflation