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What are the factors that contribute to “Stagflation”?
1. High Prices
2. High spending
3. High inflation
4. Low Economic growth
5. Low unemployment
Select the correct answer using the codes given below:
- a)1, 2 and 3
- b)1, 3 and 4
- c)4 and 5
- d)All of the above
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
What are the factors that contribute to “Stagflation”?1. High Prices2...
Factors that contribute to “Stagflation”:
1. High Prices
2. High spending
3. High inflation
4. Low Economic growth
5. Low unemployment
Explanation:
Stagflation is a condition when an economy experiences stagnant growth along with high inflation and unemployment rates. It is a rare economic situation, but when it occurs, it can be very damaging to an economy. The factors that contribute to stagflation are:
1. High Prices: When the prices of goods and services are high, it affects the purchasing power of consumers, which leads to a decrease in demand and ultimately affects economic growth.
2. High Spending: When the government or individuals spend beyond their means, it leads to an increase in demand and ultimately affects the price level of goods and services.
3. High Inflation: When there is an increase in the supply of money, it leads to inflation, and when inflation is high, it affects economic growth.
4. Low Economic Growth: When an economy experiences low economic growth or recession, it leads to a decrease in demand, which ultimately affects the price level of goods and services.
5. Low Unemployment: When there is low unemployment, it leads to an increase in demand, which ultimately affects the price level of goods and services.
Therefore, all the above factors contribute to the occurrence of stagflation. To avoid stagflation, the government needs to maintain a balance between economic growth, inflation, and unemployment rates.
1. High Prices
2. High spending
3. High inflation
4. Low Economic growth
5. Low unemployment
Explanation:
Stagflation is a condition when an economy experiences stagnant growth along with high inflation and unemployment rates. It is a rare economic situation, but when it occurs, it can be very damaging to an economy. The factors that contribute to stagflation are:
1. High Prices: When the prices of goods and services are high, it affects the purchasing power of consumers, which leads to a decrease in demand and ultimately affects economic growth.
2. High Spending: When the government or individuals spend beyond their means, it leads to an increase in demand and ultimately affects the price level of goods and services.
3. High Inflation: When there is an increase in the supply of money, it leads to inflation, and when inflation is high, it affects economic growth.
4. Low Economic Growth: When an economy experiences low economic growth or recession, it leads to a decrease in demand, which ultimately affects the price level of goods and services.
5. Low Unemployment: When there is low unemployment, it leads to an increase in demand, which ultimately affects the price level of goods and services.
Therefore, all the above factors contribute to the occurrence of stagflation. To avoid stagflation, the government needs to maintain a balance between economic growth, inflation, and unemployment rates.
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What are the factors that contribute to “Stagflation”?1. High Prices2...
What are the factors that contribute to stagflation
high prices
high spending
low economic growth
high prices
high spending
low economic growth
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