Stagflation most likely comes from
A) a negative demand shock.
B) a negative supply shock.
C) a positive demand shock.
D) a positive supply shock.
E) the North American Free Trade Agreement (NAFTA).

Question

Quizplus · Accepted Answer

Stagflation is a combination of stagnant economic growth and high inflation. This typically occurs due to a negative supply shock, such as a sudden increase in the price of oil or a major natural disaster that disrupts production processes. The decrease in supply leads to higher prices for goods and services, while the decreased production and employment leads to little or no economic growth.

Stagflation Most Likely Comes from