The economic condition characterized by stagnant economic growth, high unemployment, and simultaneously high inflation is known as ___.
- stagflation
- drives out
- National Income
- rivalrous (or unregulated common)
Answer: stagflation
Stagflation is a portmanteau of stagnation and inflation. It presents a severe dilemma for policymakers because traditional monetary tools used to curb inflation (like raising interest rates) will further depress growth and worsen unemployment.