ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Stagflation is the simultaneous appearance in an economy of slow growth, high unemployment, and rising prices. Once thought by economists to be impossible, stagflation has occurred repeatedly in the developed world since the 1970s. Policy solutions for slow growth tend to worsen inflation, and vice versa.

Detailed explanation-2: -Stagflation happens when inflation exists in tandem with slow economic growth and high unemployment. Typically, these economic conditions don’t occur together. Unemployment and inflation tend to be inversely correlated.

Detailed explanation-3: -So the stag-is for stagnation. So we’re talking about economic growth slowing down, and then the-flation is for inflation, prices going up. And basically when you’ve got the two together, slowing growth combined with rising prices, you’ve got stagflation.

Detailed explanation-4: -Stagflation: It is a state of the economy in which economic activity is showing down, but wages and prices continue to rise. The term is blend of the words stagnation and inflation. Was this answer helpful?

Detailed explanation-5: -Stagflation is a period of rising inflation but falling output and rising unemployment. Stagflaton is often a period of falling real incomes as wages struggle to keep up with rising prices. Stagflation is often caused by a rise in the price of commodities, such as oil.