ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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some parts of the economy are thriving like the mining boom and other parts suffer with inflation
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long term unemployment and hyperinflation combine to create difficult economic conditions the government can’t fix
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external shocks like war cause imports to replace domestic production and cause unemployment
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some parts of the economy have strong economic growth while other sectors struggle with stagnant growth
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Detailed explanation-1: -There are various causes of Stagnation in the economy. Examples include economic shocks, the aging population, low economic growth, lack of productive growth, rising unemployment, increased interest rates, etc. Stagflation is the combination of Stagnation and high inflation. The recession exhibits a shrinking economy.
Detailed explanation-2: -Broadly speaking, there are two main sources of economic growth: growth in the size of the workforce and growth in the productivity (output per hour worked) of that workforce. Either can increase the overall size of the economy but only strong productivity growth can increase per capita GDP and income.
Detailed explanation-3: -Stagflation is an economic cycle characterized by slow growth and a high unemployment rate accompanied by inflation. Economic policymakers find this combination particularly difficult to handle, as attempting to correct one of the factors can exacerbate another.
Detailed explanation-4: -Poor infrastructure. Human capital inadequacies. Primary product dependency. Declining terms of trade. Savings gap; inadequate capital accumulation. Foreign currency gap and capital flight. Corruption, poor governance, impact of civil war. Population issues.