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    Question

    When in an economy, a combination of low growth &

    rising inflation is witnessed, that situation is called _________ .
    A Cost-push inflation Correct Answer Incorrect Answer
    B Demand-pull inflation Correct Answer Incorrect Answer
    C Stagflation Correct Answer Incorrect Answer
    D Disinflation Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Stagflation or recession-inflation is a situation in which the inflation rate is high or increasing, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actions intended to lower inflation may exacerbate unemployment.

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