Asked by Owuraku Agyekum on Jun 28, 2024
Verified
Stagflation involves simultaneous high levels of
A) unemployment and interest rates.
B) interest rates and inflation.
C) unemployment and inflation.
D) economic growth and inflation.
E) stagnation and degeneracy.
Stagflation
A situation in an economy characterized by slow economic growth combined with high unemployment and high inflation.
Unemployment
The situation where individuals who are capable of working and are actively seeking work are unable to find employment.
Inflation
The velocity at which the broad price tags for products and services surge, weakening the power to purchase.
- Comprehend the theory and ramifications of inflation as well as disinflation.
- Comprehend the link between joblessness figures and the state of the economy.
Verified Answer
ZK
Zybrea KnightJul 04, 2024
Final Answer :
C
Explanation :
Stagflation is a situation where there is a slowdown in economic growth accompanied by high levels of inflation and unemployment. Thus, choice C is the correct option as it involves simultaneous high levels of unemployment and inflation. High unemployment is a symptom of an economic slowdown, while inflation results from increasing prices of goods and services despite a sluggish economy.
Learning Objectives
- Comprehend the theory and ramifications of inflation as well as disinflation.
- Comprehend the link between joblessness figures and the state of the economy.