Which of the following best describes stagflation?
A)Rising unemployment together with economic growth
B)Deflation coupled with a decline in money supply
C)Deficits coupled with rising unemployment
D)Rising unemployment and high inflation rates
E)Inflation coupled with balance of trade deficits

Question

Quizplus · Accepted Answer

Stagflation is a condition in which there is a combination of rising unemployment and high inflation rates. It is a situation that is difficult for policymakers to address as the typical approach to addressing inflation by raising interest rates can exacerbate the unemployment problem.

Which of the Following Best Describes Stagflation