During the early phases of recovery from stagflation,
A) inflation always begins to fall immediately.
B) inflation may rise or fall depending on whether or not inflationary expectations push prices up harder than excess supply pressures push them down.
C) output begins to increase immediately in all but very exceptional cases.
D) a and c.
E) b and c.

Question

Quizplus · Accepted Answer

Inflation may rise or fall depending on whether or not inflationary expectations push prices up harder than excess supply pressures push them down.

During the Early Phases of Recovery from Stagflation