Answer:
Economic growth may cause cyclical unemployment to decrease, but it may also cause a rise in the prices of commonly used goods and services, known as inflation.
Explanation:
Macroeconomic theory suggests that capitalism is cyclical, that is, the capitalist economy alters moments of expansion and economic retraction.
In a scenario of expansion, the economy is heated, increasing the demand for labor and the national average income. This causes prices of goods and services to increase as demand increases. This is called inflation - the continuous and generalized increase of goods and services in a determinate period of time.
On the contrary, in a time of economic downturn, prices are falling and unemployment increases, because demand is insufficient and causes companies to reduce their production, dismissing employees.
