Stagflation is associated with
A) cost-push inflation.
B) demand-pull inflation.
C) both types of inflation.
D) neither cost-push inflation or demand-pull inflation because it is a different concept altogether.

Question

Quizplus · Accepted Answer

Stagflation is a situation where there is a combination of high inflation and high unemployment or low economic growth. It is often associated with cost-push inflation, where prices are pushed up by an increase in production costs, such as wages or raw material prices. Demand-pull inflation, which occurs when there is too much money chasing too few goods, is less likely to cause stagflation as it is usually associated with a period of high economic growth and low unemployment.

Stagflation Is Associated with