In macroeconomic theory, what economic condition is defined as the coexistence of stagnant economic growth, high unemployment, and high inflation?
Answer and explanation
Correct answer: A. Stagflation
- Step 1: Stagflation combines economic stagnation (slow or negative growth and elevated joblessness) with persistent inflation, famously experienced during the 1970s oil shocks. Answer: Stagflation. Why not the others: Hyperinflation is extremely rapid price escalation, reflation stimulates demand after deflation, and disinflation is a slowdown in the inflation rate.
Practise more Microeconomics, Business Operations, Financial Management and the Macroeconomic Environment.
Free questions with an explanation for every one, and full timed Poklicna matura (Vocational Matura Slovenia) mock tests.
More Microeconomics, Business Operations, Financial Management and the Macroeconomic Environment questions
- In microeconomics, what fundamental economic concept describes the value of the next best alternative forgone when making a decision?
- In market analysis, what effect does an increase in the market price of a normal good generally have on consumer demand, ceteris paribus?
- In microeconomic theory, what is the term for a market structure characterized by a single seller supplying a unique product with no close s…
- In business production, which of the following is classified as a fixed cost in the short run?
- In price elasticity analysis, what does a price elasticity of demand coefficient with an absolute value greater than one (|Ed| > 1) indicate…
- In economic analysis, at what point is market equilibrium achieved in a competitive market for consumer goods?