๐ ๐ฌ๐ญ๐๐๐ฅ๐-๐ฉ๐ซ๐ข๐๐ ๐๐๐จ๐ง๐จ๐ฆ๐ฒ (controlled inflation) ๐ฐ๐ข๐ญ๐ก ๐ก๐ข๐ ๐ก ๐๐ฆ๐ฉ๐ฅ๐จ๐ฒ๐ฆ๐๐ง๐ญ ๐ข๐ฌ ๐๐ง ๐ข๐๐๐๐ฅ ๐๐๐จ๐ง๐จ๐ฆ๐ข๐ ๐ฌ๐๐๐ง๐๐ซ๐ข๐จ.
Because when the employment rate is high, then employers are in demand, so they offer high wages; therefore, production cost is increasing, so businesses increase prices.
Thatโs how inflation increases.
Now, how does the US deal with the employment-to-inflation ratio to achieve an ideal economic scenario?
One of the tools they use is the interest rate.
The Federal Reserve Board is the governing body of the central banking system of the United States.
When unemployment is high, then the Fed Reserve Board cuts (decreases) the rates of interest so individuals and businesses borrow money from banks, avoid debts, and start investing, so at that time the stocks, crypto, and forex markets are bullish, and also unemployment is decreased, which is the main
objective behind the interest rate cut.
But now we already know that when unemployment decreases, then employment increases, and when employment increases, then inflation increases, so therefore controlled inflation with full employment is ideal, and for that, the US Fed Reserve Institute is taking this thing seriously and managing it with time. Every couple of months they show reports to the public.
Does Pakistan have regulations in place to manage these key issues?
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