Can "stagflation" occur as part of a business cycle triggered by a change in nominal GDP growth?
A)It is the first thing that happens after GDP growth accelerates,before expected inflation has changed much.
B)It happens after the cyclical peak in output from a GDP growth acceleration,and expected inflation is catching up to actual inflation.
C)It is the first thing that happens after GDP growth decelerates,before expected inflation has changed much.
D)It is part of the business cycle triggered by supply shocks,but not by demand shocks.

Question

Quizplus · Accepted Answer

Stagflation occurs when economic growth slows down (or even becomes negative) while inflation remains high. This can happen after the cyclical peak in output from a GDP growth acceleration, as expected inflation is catching up to actual inflation.

Can "Stagflation" Occur as Part of a Business Cycle Triggered