Question

The term stagflation refers to a situation where ?
A) Growth has no relation with the change in prices
B) Rate of growth is faster than the rate of price increase
C) Rate of growth is slower than the rate of price increase
D) Rate of growth and prices both are decreasing

Answer 1

$\huge{Hey Mate!!!}$

☆☞ Here is ur answer ☜☆

✔✔ C) Rate of growth is slower than the rate of price increase.

HOPE IT HELPS!

Answer 2

Stagflation is a situation of sluggish economic growth, high rate of unemployment and high inflation.

The two main reasons for stagflation is : supply shock and unproductive economic policies.

When an economy witnesses an increase or decrease in the supply of a commodity or service it leads to a supply shock. For example an upward rise like in the price of oil lead to rise in prices as the cost of production becomes expensive and less profitable and ultimately leading to slowing down the economic growth.

Another major factor for stagflation is the poor economic policy followed by the Government. For example if the policies of the government hinders the growth of industries by allowing an uptick in the the money supply too quickly it can lead to slowing down of economic growth and rising inflation.

Option 3 is correct