Which of the following is true about stagflation?
A)It can be corrected by increases in aggregate supply.
B)It results in a lower value of the misery index.
C)It can be corrected by demand-side policies.
D)It causes higher prices and lower unemployment.

Question

Quizplus · Accepted Answer

Stagflation refers to an economy that is experiencing both stagnant economic growth and rising inflation. One potential solution is to increase aggregate supply, which can help drive down prices while boosting economic activity. Demand-side policies may not be as effective in addressing stagflation, as they could exacerbate inflationary pressures. Stagflation typically results in a higher value of the misery index, which takes into account both inflation and unemployment, so B and D are incorrect.

Which of the Following Is True About Stagflation