Which of the following is true about stagflation?
A)It can be corrected by policies that increase aggregate supply.
B)It results in a lower value of the misery index.
C)It can be corrected by demand-side policies.

Question

Quizplus · Accepted Answer

Stagflation is a combination of stagnant economic growth and rising inflation. It cannot be corrected by demand-side policies such as increasing government spending or cutting taxes, as these policies would only exacerbate the inflationary pressures. However, policies that increase aggregate supply, such as investments in technology and infrastructure or deregulation, can help to stimulate economic growth while also reducing inflation. A lower value of the misery index (which combines the unemployment rate and inflation rate) would actually indicate better economic conditions, which is not a characteristic of stagflation.

Which of the Following Is True About Stagflation