Question

A situation in which both unemployment and inflation rates are high is known as ______.

Answer 1

Stagflation is a condition in which both the unemployment rate and the inflation rate are high. Stagflation is characterised by slower economic development, low employment rates, and increased inflation rates. Stagflation is the occurrence of low economic growth, high unemployment.

In terms of economics, stagflation, sometimes known as recession-inflation, is a state in which unemployment is consistently high, the economy is growing slowly, and the inflation rate is high or rising. When inflation and economic stagnation coexist, this is known as stagflation. The economy is in a state of stagnation due to rising unemployment.

The term "stagflation" was first used in the 1970s, a period of both high inflation and rising unemployment. Stagflation wasn't commonly acknowledged until the middle of the 20th century.

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