Summary

There are three main types of unemployment:

1. Structural

2. Cyclical

3. Frictional

Unemployment means that an economy can't operate on its ppf

As AD increases unemployment decreases

The natural rate of unemployment recognises there will always be some level of unemployment in the economy

The Phillips curve shows an inverse relationship between unemployment and inflation

Inflation is a rise in the general level of prices

There are two causes of inflation:

1. Cost push

2. Demand pull