Inflation is defined as ôan increase in the price of a basket of goods and services that is representative of the economy as a wholeö (Moffatt [a]). Unemployment(or more precisely, the unemployment rate(is defined as ôThe unemployment rate is the percentage of the population who are willing to work for the current market wage for someone of his or her skill level but cannot find employmentö (Moffatt [b]). According to professor Carl Walsh, ôInflation will tend to rise if the unemployment rate falls below the natural rate,ö but ôhigher inflation brings no benefit in terms of lower average unemployment, nor does lower inflation involve any cost in terms of higher average unemployment,ö so ôits appropriate role is to control inflation and, in the short run, help stabilize the economy around the natural rateö (Walsh, 1998).
Most recent news stories about Wal-Mart involve their Gestapo-like union-busting strategies and other radical efforts to keep prices low. What many people do not realize, however, is that the American economyÆs ups and downs have a connection to what Wal-Mart does. In ôThe Wal-Mart You DonÆt Know,ö Charles Fishman details the cost-slashing strategies employed by Wal-Mart and how they affect the national economy. Fishman begins by saying, ôThe giant retailer's low prices often come with a high cost. Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas. Are we shopping our way straight to the unemployment line?ö (Fishman, 2003). Fishman continues by describing how Wal-Mart demands such low prices from its suppliers that it forces them to supply ht at a loss; some of them go into bankruptcy after becoming Wal-Mart suppliers. As rigorous and unprofitable as Wal-MartÆs tactics are for suppliers, however, they have little choice but to do all they can to achieve the coveted position of being a Wal-Mart supplier. Wal-Mart ôdoes more busin...