Stagflation is defined as
A)decreased output accompanied by a higher price level
B)decreased output accompanied by a lower price level
C)increased output accompanied by a lower price level
D)increased output accompanied by a higher price level
E)stagnation in the rate of inflation (i.e.,no appreciable change in the rate of inflation for a year or more)

Question

Quizplus · Accepted Answer

Stagflation is an economic situation where there is a combination of high inflation and stagnant economic growth, which means decreased output. Therefore, the correct definition of stagflation is decreased output accompanied by a higher price level. Option A is the only choice that fits this definition.

Stagflation Is Defined as