Stagflation occurs when the economy experiences ?
Correct answer: B. rising prices and falling output
- A. rising prices and rising output
- B. rising prices and falling output
- C. falling prices and falling output
- D. falling prices and rising output
Explanation
Stagflation combines economic stagnation with inflation, meaning output falls or stagnates while the price level rises. It is commonly caused by an adverse supply shock.
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