Stagflation is the result of
A) a decrease in short-run aggregate supply.
B) an increase in short-run aggregate supply.
C) an increase in aggregate demand.
D) a decrease in aggregate demand.

Question

Quizplus · Accepted Answer

Stagflation occurs when there is a simultaneous increase in the general price level and a decrease in real output or GDP. This is caused by a decrease in short-run aggregate supply, which can be caused by factors such as an increase in the price of inputs like raw materials or a decrease in the availability of resources like labor or capital.

Stagflation Is the Result of