Stagflation refers to a situation which is characterised by
(A) stagnant employment and deflation
(B) deflation and rising unemployment
(C) inflation and rising employment
(D) inflation and rising unemployment
Correct Answer : inflation and rising unemployment
Question Asked : SSC Graduate Level Tier-I Exam 2013
Explanation : Stagflation describes a situation where an inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. It raises a dilemma for economic policy since actions designed to lower inflation may exacerbate unemployment, and vice versa.
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