Stagflation results from
A) a leftward shift in the short-run aggregate supply curve.
B) a rightward shift in the aggregate demand curve.
C) a rightward shift in the short-run aggregate supply curve.
D) an increase in government expenditures financed by an increase in the quantity of money.

Question

Quizplus · Accepted Answer

Stagflation is characterized by high inflation and high unemployment, which typically occurs when there is a leftward shift in the short-run aggregate supply curve. This shift increases prices (inflation) while reducing output (leading to higher unemployment).

Stagflation Results from