Unemployment increases crime and lowers the spirit of volunteerism in a society. It also reduces the consumer spending which can result to a recession or a depression if policies to revert the situation are not put in place.
Since, the unemployed do not have money to spend the demand of good and services reduces, this can make businesses to generate lower profits and as result trigger a ripple effect of workforce reduction.
Inflation erodes the purchasing power, that means what one could afford to buy becomes a tall order to get it, the standards of living are compromised, the sellers hold goods anticipating to sell the at higher price in the future and this brings in the issue of emergence of a black market.
I would rather choose a policy that increases inflation than the one increases unemployment. This is because it’s better to have some dollars than to have none.
