Stagflation is:

CA Foundation · Business Economics · PYQS · January 2026
Stagflation is:
(A) A. Increased taxes leading to reduced disposable income
(B) B. Economic situation where inflation and unemployment exist side by side
(C) C. Easy transmission of economic instability from one country to other countries
(D) D. Improved economic stability

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Economic situation where inflation and unemployment exist side by side

Topics: Business Cycles

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