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Q: The situation in an economy when inflation and unemployment both are at higher levels is known as ____.
  • A. reinflation
  • B. stagflation
  • C. inflation gap
  • D. inflation premium
Correct Answer: Option B - Stagflation is an economic situation where the economy experiences the combination of high rate of Inflation and Unemployment and economic growth going slow.
B. Stagflation is an economic situation where the economy experiences the combination of high rate of Inflation and Unemployment and economic growth going slow.

Explanations:

Stagflation is an economic situation where the economy experiences the combination of high rate of Inflation and Unemployment and economic growth going slow.