Which of the following occurs simultaneously with a higher price level and leads to stagflation?
A) lower employment
B) higher aggregate output
C) federal budget deficits
D) federal budget surpluses

Question

Which of the following occurs simultaneously with a higher price level and leads to stagflation?  
A) lower employment 
B) higher aggregate output 
C) federal budget deficits 
D) federal budget surpluses

Quizplus · Accepted Answer

When there is a higher price level and lower employment, it means that companies are producing less due to the increased costs of production, but they still have to charge more for their goods and services to maintain profitability. This leads to stagflation, as there is both high inflation and low economic growth. The other choices are not directly related to stagflation.

Which of the Following Occurs Simultaneously with a Higher Price