Question

Stagflation means a simultaneous decrease in the unemployment and inflation rates.

a. True
b. False

Answer 1

Stagflation refers to a situation where there is a simultaneous increase in both unemployment and inflation rates.

Step-by-step explanation:

The statement is false. Stagflation refers to a situation in which there is a simultaneous increase in both the unemployment and inflation rates, rather than a decrease. It is characterized by a stagnant economy with high levels of unemployment and rising prices. This phenomenon was observed in the United States during the deep recession from 1973 to 1975, and again in back-to-back recessions from 1980 to 1982, along with many other countries around the world.