Question

Explain the natural unemployment rate and its relationship to inflation rate. What is the difference between deflation and disinflation?

please anwer briefly.

Answer 1

Natural unemployment rate means when due to real or voluntary economic forces minimum unemployment rate occurs it is cled natiral unemployment rate.

The relationship between natural unemployment rate and inflation is inverse relationship that is when the unemployment rate increases inflation decreases and vice versa

Difference between deflation and disinflation -

• When throughout the economy price levels decrease theb deflation occurs while when inflation of price slows down temporarily then disinflation occurs
• The opposite of inflation is called deflation