"The period of high inflation, low economic growth and high unemployment rate is termed as: "
Answers
Answer:
The term is Depression in the economy
Explanation:
Every economy goes through cycles of booms and slumps and this cycle repeats itself after certain intervals. Economic depression is the state of economy characterised by-
High inflation - Goods become expensive and the value of money goes down. Thus in order to buy the same products, individuals have to part with more money and are left with less disposable income and less savings.
Low economic growth: Due to increased prices of goods and services, their respective demand goes down thus bringing economic slowdown.
High Unemployment: In the state of depression, due to low demand, manufacturers are forced to close or lower their scale of operations, resulting in layoffs and firing of employees. Government has a big part to play and provide minimum employment opportunities like road construction etc to ensure sustenance of the people.
The period of high inflation, low economic growth, and the high unemployment rate is termed as stagflation.
Explanation:
- Stagflation leads to an increase in prices, high unemployment and low economic growth of the country.
- It can also be called inflation where there is a fall in the GDP of the country. It is a situation of the economy which moves into a stagnant position.
- This could be due to a decrease in the production capacity of the country or maybe a sudden increase in a certain commodity that has affected the production of goods.
- It results in high transportation costs, production costs, operational costs and more.
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