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These, in turn, contribute to secondary factors such as lack of markets, poor infrastructure, poor leadership, bad governance, under-employment, lack of skills, lack of capital, and others. The solution to the social problem of poverty is the social solution of removing the factors of poverty.hese, in turn, contribute to secondary factors such as lack of markets, poor infrastructure, poor leadership, bad governance, under-employment, lack of skills, lack of capital, and others. The solution to the social problem of poverty is the social solution of removing the factors of poverty.
1 Inflation reduces unemployment to the extent that unemployment is caused by nominal wage rigidity. 2  When demand for labor falls but nominal wages do not, as typically occurs during a recession, the supply and demand for labor cannot reach equilibrium, and unemployment results. Inflation reduces unemployment to the extent that unemployment is caused by nominal wage rigidity. 2  When demand for labor falls but nominal wages do not, as typically occurs during a recession, the supply and demand for labor cannot reach equilibrium, and unemployment results.