Question

PLEASE HELP

Why were some economists unsure of how to fight stagflation?
It only needs to be about a sentence.

Answer 1

Answer: The reason was because Economists at that time believed that inflation only occurred when the demand for goods was high.

Explanation:

Stagflation occurred in the 1970's in the United States under the rule of President Gerald R. Ford. Stagflation is a term used to describe a situation of both stagnation and inflation in the economy. The period was a tough time in the history of America. It occurred just after the tenure of President Johnson who contributed to the crisis through his policy of pumping money into the economy to increase spending without increasing taxes. The resultant effect of this was inflation.

America was also dependent on oil at that time, even though the price of oil was rapidly increasing. The period saw them importing more goods than exporting. Also, jobs were lost. Economists tried to solve the issue but it was difficult because they believed that inflation could only occur when the demand for goods was high.

Answer 2

Stagflation is the combination of stagnation and inflation. Its simply mean continues increase in inflation while consumer demand for product is stagnant and there is relatively high unemployment

Reason;

Some economist hold that inflation is caused when demand for goods are high and demand for a product can not be controlled where there is no price regulation.