The purpose of this project is to enlighten people and all the students of Management Department on Inflation and unemployment in a developing country: Nigeria Experience. In order to carry out an indept study of the subject matter, the author reviewed the records kept in view of inflation and unemployment. This project is divided into five chapter. The first chapter, which is the introduction, deals with the background of the study, up to the definition of the terms. Various problems associated with inflations and unemployment were also stated. The significance and limitation of the study were introduced in this chapter. The second chapter contains the literature review of inflation and unemployment in Nigeria. This review was made up of the concepts of inflation and unemployment. Various contribution by different scholars were also stated. Theories causes and consequences of the subject matter was also highlighted. The effects of inflation in Nigeria and policies stated with the view to curb this ugly trend was also stressed. Various types of unemployment found in Nigeria and its effects, together with the suggestion made by expert in the economy with view to decrease its effect were critically discussed. The third chapter consist of methodology, research design and data analysis techniques. The aim of this chapter is to desirable how this thesis was carried out. While the fourth segment of work involved the presentation, analysis and interpretation of the data. Some of the hypothesis drawn up in chapter one were tested using chi-square method of testing hypothesis. This was made to enable the author draw a clear conclusion in the succeeding chapter. Finally, chapter five was the end of this work, from where the author expressed his summary, recommendation and conclusion to support his indept knowledge from the literature review.
1.1 BACKGROUND OF THE STUDY
The research is based on two macro – concept, which are inflation and unemployment. And these two macro-concept have been very big problem facing developing nations of the world with Nigeria as a good example.
Inflation refers to a persistent rise in the general price level, the price of most goods and services rises steadily but not necessarily at the same rate during inflationary period, there is too much money in circulation, and the too much money in circulation chases fewer goods and services and equally the valve of money therefore fulls during inflationary period.
1)A period, Price increase (which do not persist) are not regarded as inflation, periodic increases and fall in the general price level lack to a condition of price instability.
2)A period of rising prices deliberately caused by the government is known as re-inflation.
Unemployment concept, generally can be ambiguous; the term unemployment could be used in relation to any factors of production, which is idle and not being utilized for production. Therefore labour is said to be unemployed, when the people in the labour force are unable to find job.
According to Okonkwo (1986) Inflation is a rise in the general level price (or average level of price) of all goods and services, he said that the general price level, this varies inversely with the purchasing power decreasing by one – half. If price has purchasing power doubles. Therefore, inflation is also reduction in the purchasing power of a unit of money. Before 1970, unemployment and inflation are not known in Nigeria as it is today.
Solow (1979) sees inflation going on when one needs more and more money to buy some representative bundle of goods and services or a sustained fall in the purchasing power of money. It is a sustained rising trend, in the general level or put another way. It is a high and persistent rise in the price level.