Examine Labor Force Participation , unemployment rate and Inflation Rate… Presented by: Name : Israt Jahan Roll:20 Course name : Principles Of Economics 2 Institute Of Health Economics University Of Dhaka Inflation Rate: ◦Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time. The inflation rate of Bangladesh from the year 2007 to 2012: Year CPI Inflation rate 2007 103.5 9.11% 2008 112.7 8.9% 2009 118.3 4.91% 2010 129.4 9.37% 2011 144.2 11.46% 2012 153.2 6.23% Graph of Inflation Rate: Relationship between Inflation and unemployment rate: ◦When unemployment rates increase, Inflation decreases. ◦As unemployment rates decreases , Inflation increases. Relationship between Inflation and unemployment rate: Year CPI Labor Force(million) Working age Unemployment population(million ) 2007 103.5 47.4 83.3 3.77% 2008 112.7 48.1 84.7 4.08% 2009 118.3 48.7 85.9 5% 2010 129.4 49.1 86.6 3.38% 2011 144.2 49.4 87.4 3.91% 2012 153.2 50 88.5 4.43% Labor Force Participation rate: ◦ If unemployment rate increases then labor force participation rate will decrease. ◦ If unemployment rate decreases then labor force participation rate will increase. ◦ It works like vice-versa Labor Force Participation rate: Year Labor Force(million) Working age population(million) Labor force participation rate 2007 47.4 83.3 56.9% 2008 48.1 84.7 56.81% 2009 48.7 85.9 56.72% 2010 49.1 86.6 56.69% 2011 49.4 87.4 56.52% 2012 50 88.5 56.5% Relationship between labor force participation rate and unemployment rate: Relationship among Inflation rate , unemployment rate and labor force participation rate: There is a strong relationship between inflation and unemployment rate . Relationship between unemployment rate and inflation is negative.Because if he inflation rate increases of a country money supply also increses.if money supply increases then there occurred many job opportunities which demand for labor force.Thus, the unemployment rate decrease. Last of all , It can be said that, there are a strong relationship among inflation rate ,labor force participation rate and unemploynent rate.