What causes stagflation?
A) Aggregate demand increases.
B) Aggregate demand decreases.
C) Short-run aggregate supply increases.
D) Short-run aggregate supply decreases.

Name: What causes stagflation? A) Aggregate demand increases. B) Aggregate demand decreases. C) Short-run aggregate supply increases. D) Short-run aggregate supply decreases.
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Question

Quizplus · Accepted Answer

Stagflation is caused by a decrease in short-run aggregate supply, which leads to higher prices and lower output, combining stagnation with inflation.

What Causes Stagflation