Stagflation is a double whammy economic situation.
Features of stagflation - the presence of both:
(1) economic stagnation (little, no or negative economic growth)
(2) inflation high or increasing
High prices for goods and services reduce demand, which negatively affects business. Businesses reduce costs by decreasing production which reduces supply, which can result in higher prices. This can create a vicious cycle.
Consequences:
(1) high unemployment
(2) high budget deficits
(3) social dissatisfaction, with high misery index
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