In a Stagflation Phase, a Decrease in Short-Run Aggregate Supply

question 41

Multiple Choice

In a stagflation phase, a decrease in short-run aggregate supply will generate

• A) an increase in the inflation rate and in the unemployment rate.
• B) an increase in the inflation rate and a decrease in the unemployment rate.
• C) an increase in the inflation rate with no change in the unemployment rate.
• D) a decrease in the inflation rate and an increase in the unemployment rate.

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Definitions:

Hundred Years' War

A prolonged series of conflicts from 1337 to 1453 between England and France, marked by several periods of warfare and truces.

England

A country that is part of the United Kingdom, located on the island of Great Britain, known for its rich history, cultural heritage, and major contributions to arts, science, and democracy.

Encomienda

A labor system in Spanish America giving settlers the right to tax local Indigenous people or to demand their labor in exchange for protecting them and teaching them Christianity.