INTRODUCTION
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.
