Stagflation refers to a situation in which the economy is experiencing:
A) high economic growth and high inflation.
B) low economic growth and low inflation.
C) high economic growth and low inflation.
D) low economic growth and high inflation.

Question

Quizplus · Accepted Answer

Stagflation refers to a situation in which the economy is experiencing low economic growth (stagnation) and high inflation. It is a rare occurrence, but when it does happen, it can be difficult for policymakers to combat as traditional solutions for high inflation, such as raising interest rates, can further depress economic growth.

Stagflation Refers to a Situation in Which the Economy Is