Stagflation Occurs When

question 57

Multiple Choice

Stagflation occurs when:

• A) the inflation rate decreases and current output decreases.
• B) the inflation rate increases and current output decreases.
• C) the inflation rate decreases and current output increases.
• D) the inflation rate increases and current output increases.

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Definitions:

Economies Of Scale

The cost advantage that arises with increased output of a product, where the cost per unit decreases as production expands.

Financial Resources

Funds available to a business or individual for spending in the form of cash, liquid securities, and credit lines.

High Capital Costs

Expenses incurred in acquiring or upgrading physical assets such as buildings and machinery, which can be a barrier to entry for new companies.

Maximizing Profits

A strategy or goal of increasing the difference between the total revenue and the total cost as much as possible.