SIE practice questionhardEconomic Indicators - Stagflation
A period characterized by high unemployment and high inflation is known as:
- ADisinflation
- BDeflation
- CExpansion
- DStagflation✓ Correct answer
Explanation
Why D — Stagflation
Stagflation is the simultaneous occurrence of stagnant economic growth (unemployment) and inflation. Deflation is a decrease in general price level, expansion is growth, and disinflation is slowing inflation.
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