The feature of the 1970s American economy that economists called "stagflation" consisted of economic stagnation with a combination of
A) high unemployment and low inflation.
B) low unemployment and high inflation.
C) low unemployment and low inflation.
D) high unemployment and high inflation.

Question

Quizplus · Accepted Answer

Stagflation was a unique combination of high unemployment and high inflation, which was contrary to traditional economic theory stating that low unemployment should lead to higher inflation. The 1970s American economy experienced stagnant economic growth while simultaneously facing inflationary pressures due to rising oil prices and wage demands from labor unions.

The Feature of the 1970s American Economy That Economists Called