Stagflation is defined as a period of
A) positive inflationary expectations with unemployment exceeding the natural rate.
B) positive inflationary expectations with actual GDP exceeding potential.
C) positive inflationary expectations associated with negative growth in net exports.
D) positive inflationary expectations associated with high real interest rates.
E) none of the above.

Question

Quizplus · Accepted Answer

Stagflation is characterized by high inflation and high unemployment, which means unemployment exceeds the natural rate while inflationary expectations remain positive.

Stagflation Is Defined as a Period of