it can be observed that the unemployment rate of US has been decreasing with the passage of time. In this connection, it can be mentioned that lower unemployment rate would influence the higher GDP rate of the economy. Nevertheless, Wang, Chia-Nan, and Van-ThanhPhan (254) questioned that very lower rate of unemployment would lead to the hyperinflation. The country will suffer from the problem of reallocation of wealth. As a consequence, it can be interpreted that this would convert the wealth from the residents to the account of the government. In addition, hyperinflation would reduce the purchasing power of the private and the public savings. More specifically, the economy would suffer from the economic instability condition. Hence, it can be mentioned that though the biasness of labor union would lead voluntary unemployment, however, the trend of the unemployment rate of the country would lead to the economy US to suffer from the situation of hyperinflation.
GDP of US
In the opinion of Mills, Brian (654), it can be mentioned that the economy of United States is assumed as the largest economy within the world in terms of nominal GDP. It occupies the second largest position in terms of purchasing power parity. It can be observed that the unemployment rate of this country is very lower; however, the voluntary unemployment can affect this rate. On the other hand, in order to improve the country’s GDP growth rate, it is necessary to control the hyperinflationary situation.
The above line diagram depicted the GDP growth rate of US. From the above diagram, it can be observed that the GDP growth rate of the country has increased after the year of 2010. From 2011, this GDP growth rate is almost at the same position. This economic situation of this country indicates that the consumption expenditure and the savings expenditure are at good position. According to Cai, Fang and Yang Lu (12), it can be mentioned that the leadership of the labor union would be helpful to increase the savings of the organizational staffs. This would lead to increase the savings of the country, which would directly affect the country’s GDP growth. Nonetheless, it can be argued that very lower unemployment would lead the situation of hyperinflation. It is known that there is a negative relationship among the unemployment rate and the inflation rate, which can be described by the Phillips curve. On the other hand, there is also a negative association among the unemployment rate and the country’s GDP growth rate and it can be discussed with the help of the concept of Okun’s law.
After the discussion, it can be mentioned that the labor union of US would lead to create the biasness among the employees regarding their wage rate. This would in turn reflect the voluntary unemployment. For this purpose, it can be mentioned that the government of the country requires focusing on the grade pay of the employees. In this purpose, the staffs would get the right to raise their voice if all of the workers would not get equal wage rate for the same grade. On the other hand, in order to control the situation of hyperinflation, the government needs to control the supply of money. In this connection, the government requires to control in the printing of money (Ohler, Adrienne, and Ian Fetters, 128). As a result, liquidity of holding money and the consumption expenditure would also be decreased. Additionally, by fixing the rate of exchange of US, the government can control the supply of money. This would in turn reduce the hyperinflation of the country.