High Inflation and Slow Economic Growth: Examining an Economy in Turmoil

Substantial Inflation and Slow Economic Growth

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Question

An economy which is experiencing substantial inflation and slow economic growth is said to be in:

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A. B. C. D.

Explanation

High and variable inflation rates have severe negative impact on an economy. At times, the economy spirals into a cycle of extremely slow growth and very high inflation. This stagnant state battered by rising prices is called "stagflation."