Stagflation occurs when the price level and real GDP .
A) falls; increases
B) rises; decreases
C) rises; increases
D) falls; decreases

Name: Stagflation occurs when the price level and real GDP . A) falls; increases B) rises; decreases C) rises; increases D) falls; decreases
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Question

Quizplus · Accepted Answer

Stagflation is characterized by a combination of inflation (rise in price level) and slow economic growth (decrease in real GDP). Therefore, the correct choice is B, which states that prices rise while real GDP decreases.

Stagflation Occurs When the Price Level and Real GDP