1.1  BACKGROUND OF THE STUDY

Inflation is regarded as the general rise in the prices of goods and services over a period of time in the nation Balami (2006). It is also connected with money and referred to as too much money in circulation chasing few commodity. Hamilton (2001) describes inflation as the increase in money supply as against low production level in the country. It is measured as the rate of increase in the general price level over a specific period of time.

 Unemployment is defined as the number of economically active population without work but are willing and seeking for work. These include those who have lost their jobs and have voluntarily left work (World Bank, 1998). The research therefore seek to determine the relationship between unemployment and inflation in Nigeria for the period (1980-2012)

1.2  STATEMENT OF THE PROBLEM

      Inflation and unemployment are the major cause of underdevelopment

In the country. The Nigerian economy is greatly affected by inflation, unemployment resulting in economic recession. Adebayo and Ogunrinola,(2006).Unemployment has led to increase waste of the nations human resources ,while inflation has resulted in the general decline of the living standard of the people . Consequently, the full potentials of labour-surplus economy have not been fully exploited. Adebayo, (2010).The problem confronting the research is to determine the relationship between unemployment and inflation in Nigeria (1980-2012).

1.3  OBJECTIVES OF THE STUDY

Inflation is regarded as the general rise in the prices of goods and services over a period of time in the nation Balami (2006). It is also connected with money and referred to as too much money in circulation chasing few commodity. Hamilton (2001) describes inflation as the increase in money supply as against low production level in the country. It is measured as the rate of increase in the general price level over a specific period of time.

 Unemployment is defined as the number of economically active population without work but are willing and seeking for work. These include those who have lost their jobs and have voluntarily left work (World Bank, 1998). The research therefore seek to determine the relationship between unemployment and inflation in Nigeria for the period (1980-2012)

To determine the relationship between unemployment and inflation in Nigeria

To determine the causes of unemployment and inflation in Nigeria

To determine the effect of unemployment and inflation in Nigeria

1.4  RESEARCH QUESTIONS

What is the relationship between unemployment and inflation in Nigeria?

What are the causes of unemployment and inflation in Nigeria?

What is the effect of unemployment and inflation in Nigeria?

1.5  SIGNIFICANCE OF THE STUDY

The study shall elucidate on the relationship between unemployment and inflation in Nigeria.

It shall also serve as a veritable source of information to economic experts and adminitrators including government officials for the formulation of policy

1.6  RESEARCH HYPOTHESIS

Ho The level unemployment and inflation in Nigeria is low

Hi   The level unemployment and inflation in Nigeria is high

1.7  SCOPE OF THE STUDY

The study focuses on the appraisal of the relationship between unemployment and inflation in Nigeria.

1.8  LIMITATIONS OF THE STUDY

The research was confronted by some constraint including geographical factor and logistics.

1.9  DEFINITIONS OF TERMS

INFLATION DEFINED

Inflation is regarded as the general rise in the prices of goods and services over a period of time in the nation Balami (2006). It is also connected with money and referred to as too much money in circulation chasing few commodity. Hamilton (2001) describes inflation as the increase in money supply as against low production level in the country. It is measured as the rate of increase in the general price level over a specific period of time.

UNEMPLOYEMENT DEFINED

Unemployment is defined as the number of economically active population without work but are willing and seeking for work. These include those who have lost their jobs and have voluntarily left work (World Bank, 1998).

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