Stagflation refers to a(n):
A)increase in inflation accompanied by constant or expanding unemployment
B)decline in the price level accompanied by increases in real output and employment
C)simultaneous increase in output and the price level
D)simultaneous reduction in output and the price level
E)period of falling inflation

Question

Quizplus · Accepted Answer

Stagflation refers to a situation where there is a combination of stagnant economic growth (high unemployment) and inflationary pressure. This occurs when the supply of goods and services is not sufficient to meet the demand, causing prices to rise while production and employment remain low. Therefore, the correct choice is (A) increase in inflation accompanied by constant or expanding unemployment.

Stagflation Refers to A(n)