In the 1970s, one of the causes of stagflation was _____
A) rising unemployment together with economic growth.
B) deflation coupled with a decline in money supply.
C) higher oil prices that shifted the aggregate supply curve left.
D) deficits coupled with rising unemployment.
E) inflation coupled with balance of trade deficits.

Question

Quizplus · Accepted Answer

The oil crisis of the 1970s caused a significant increase in oil prices, which led to a leftward shift in the aggregate supply curve. This resulted in a decrease in output and an increase in prices, leading to stagflation.

In the 1970s, One of the Causes of Stagflation Was