The concurrent problems of inflation and unemployment are termed:
A)depression.
B)downturn.
C)deflation.
D)demand-pull deflation.
E)stagflation.

Question

Quizplus · Accepted Answer

Stagflation is the term used to describe the situation where there is a simultaneous rise in inflation and unemployment. This can occur when there is a supply shock to the economy that increases costs of production and reduces output, while demand for goods or services remains strong. This leads to a situation where prices increase, but output and employment levels decrease, resulting in stagflation. The other options do not fully capture the combination of inflation and unemployment.

The Concurrent Problems of Inflation and Unemployment Are Termed