In which of the following situations would stagflation exist?
A)when prices and output rise
B)when prices rise and output falls
C)when prices fall and output rises
D)when prices and output fall

Question

Quizplus · Accepted Answer

Stagflation is a situation where inflation (prices rising) coexists with stagnant economic growth (output falls). Option B is the only choice where prices rise and output falls, which is the characteristic of stagflation.

In Which of the Following Situations Would Stagflation Exist