A potential cause of stagﬂation is
A) agricultural surpluses.
B) declining productivity.
C) improving labor productivity.
D) a rise in the value of the dollar.

Question

Quizplus · Accepted Answer

Stagflation is characterized by a combination of high inflation and stagnant economic growth. One potential cause of stagflation is declining productivity, which means that the economy is unable to produce goods and services efficiently, leading to higher prices and lower growth. Agricultural surpluses and improving labor productivity are unlikely to cause stagflation, while a rise in the value of the dollar could actually help to reduce inflation and stimulate growth.

A Potential Cause of Stagﬂation Is