Stagflation occurs when inflation ________ and GDP ________.
A)rises; rises
B)rises; falls
C)falls; rises
D)falls; falls
E)remains unchanged; rises

Question

Quizplus · Accepted Answer

Stagflation occurs when there is a simultaneous increase in inflation and a decrease in GDP. This contradicts the typical relationship between inflation and GDP, where inflation tends to increase when GDP is growing and decrease when GDP is slowing down. Therefore, the correct answer is B: rises; falls.

Stagflation Occurs When Inflation ________ and GDP ________

Stagflation Occurs When Inflation and GDP