Question

Stagflation describes a situation of:

• A. Rising prices and rising output
• B. Rising prices and falling or stagnant output
• C. Falling or stagnant prices and rising output
• D. Falling or stagnant prices and falling or stagnant output

Hint:

Know the characteristics of stagflation.

Answer 1

The Correct Option is B

Stagflation is an economic condition characterized by rising inflation (prices) and stagnant or falling output. This combination leads to a challenging economic environment. Hence, the correct answer is (b).