Question

At the onset of the recent economic slowdown, prices at the grocery stores continued to rise. in some cases, products such as milk and bread almost doubled in price. a boston newspaper reported, "the price of eggs was up 40% and milk was up 26%." consumers were already being hit with high energy costs, and now their confidence in the economy was further shaken with job cuts and a loss of discretionary income due to increases in food prices. the economy was slowing, but prices were rising, signifying the potential for ___________. deflation stagflation disinflation equalization

Answer 1

The economy was slowing, but prices were rising, signifying the potential for stagflation.
Stagflation is term used in economics to denote economic situation characterized with high unemployment, rising prices, economic growth. This situation occurs when the overall price level rises rapidly. In our case, "the price of eggs was up 40% and milk was up 26%., which means that the prices raised rapidly.