The word stagflation describes a situation in which a higher price level occurs simultaneously with
A)higher employment
B)economic growth
C)lower aggregate output
D)federal budget deficits
E)federal budget surpluses

Question

Quizplus · Accepted Answer

Stagflation refers to a situation where there is stagnant economic growth or even a decline in output (lower aggregate output) along with a higher price level. It is a combination of inflation and high unemployment, which means that Choices A, B, D, and E are not appropriate as they do not match with the phenomenon of stagflation.

The Word Stagflation Describes a Situation in Which a Higher