What is the meaning of the term stagflation ?
Correct answer: C. High inflation rate combined with high unemployment and unchanged consume demand
- A. Fall in prices due to less circulation of currency
- B. Fall in employment due to declining production
- C. High inflation rate combined with high unemployment and unchanged consume demand
- D. None of these
Explanation
Stagflation combines persistent inflation with weak economic activity and high unemployment. Unchanged or stagnant demand is an accompanying feature in the option, while the essential contrast is inflation occurring alongside unemployment and stagnation.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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