9 Nov 2021
Problem 29
Page 600
Section: REVIEW QUESTIONS
Chapter 24: The Aggregate Demand/Aggregate Supply Model
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9 Nov 2021
Introduction
Stagflation occurs when an economy faces both slow growth and rising inflation at the same time. It was first used by Lian Macleod during economic stress in the U.K in the 1960s. It was again used in the 1970s during the recessionary period when oil prices spiked all over the world. It is also termed an inflationary recession giving rise to high unemployment and slow economic growth.
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