A situation of high inflation together with stagnant output and high unemployment is called
- A.Deflation
- B.Disinflation
- C.Stagflation
- D.Reflation
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It is the hardest condition for policy to handle, because the remedy for inflation is to squeeze demand while the remedy for unemployment is to expand it, so no single step cures both; the classic episode followed the oil price shocks of the nineteen seventies.
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