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Which is an effect of stagflation Trade with other economies increases The value of a country's currency drops Prices for goods fall sharply and suddenly The GDP rises along with production levels

Rodney Fox

in Social studies

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Jeremy Wood on October 25, 2018

The second answer is correct (B). Stagflation is the worst of the cases in which an economy can achieve. It is a conjunction between the economic stagnation and inflation. Inflation is the corrosion of the value of the currency of a country, and causes it to depreciate relative to other currencies. Stagnation is the decline in economic activity at low levels and unintended. Normally, when a process of economic stagnation occurs, the fall in prices. However, in a process of stagflation the economy is stagnant and inflated. This type of situation occurs when there is a failure to carry out economic policy. We can see this in Brazil in 2015. The collapse in the conduct of fiscal policy has led the country to the recession, while the policy of artificial price control has caused the inflation to soar. The country has experienced stagflation.


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