A situation where the economy experiences unemployment along with high rate of inflation known as ____________.

deflation

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disinflation

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stagflation

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none of the above

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Solution

The correct option is B stagflation
Stagflation is an economic situation where the economy experiences the combination of inflation and stagnation. In this kind of situation the economy experiences unemployment with rise in the general price level. This kind of situation worsen economic condition as their is no benefit of increased price level.

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Similar questions

Q41.Consider the following statements:

1. Phillips Curve is representation of the relationship between tax rates and tax revenue collected by governments.

2. Laffer curve is a historical inverse relationship between rates of unemployment and corresponding rates of inflation that result within an economy

Which of the above statement(s) is/are correct?

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