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When the rate of unemployment rises during recessions, the rate of inflation is also likely to...

When the rate of unemployment rises during recessions, the rate of inflation is also likely to rise.

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A recession is a decline in total output. During recession,increased costs and stagnant or falling revenue is faced by companies.Due to increased pressure to service their debts,companies begin to lay off workers in order to cut costs.Unemplyment rises quickly, and remains elevated. People's incapability to buy goods for a prolonged time results in inflation. Hence, When the rate of unemployment rises during recessions, the rate of inflation is also likely to rise.

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