Question

What is stagflation ?

Answer 1

persistent high inflation combined with high unemployment and stagnant demand in a country's economy.

Answer 2

Answer:     Long-term, high inflation, unemployment, reducing demand

Explanation: Stagflation is, if we may say so, a type of inflation, very high that lasts for a long time and whose consequences are catastrophic for the economy of the country. These consequences are the halted production and development, which again cause high unemployment. High unemployment causes poor material conditions for people, who do not have the payment power to buy goods, and demand decreases. The fall in demand affects production badly, as there is no need to produce goods. Due to inflation, the value of the national currency decreases, thus the vicious cycle of long-term, harmful, high inflation completes the cycle. Such inflation is called stagflation.