10
QuizMultiple Choice

Banking — Unit test

Question 10 • CHS Economics

What is one consequence of stagflation?

Answer
A
The economy drastically slows down as money loses its buying power.
B
Producers cannot keep up with consumer interest and raise their prices.
C
There are not enough workers to meet the rising level of production.
D
Demand is too high and people spend more money than they should.

Explanation

Stagflation combines stagnant or very slow economic growth with inflation, which makes money buy less. So a consequence is that the economy slows while people’s purchasing power falls. Choice A describes this; the other choices focus on excess demand or production pressures rather than stagflation.

AI-written and checked against the verified answer.

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