Q.What is Stagflation ?

Stagflation = stagnation + inflation: high unemployment and slow growth occurring alongside rising prices.

• Meaning: The term combines 'stagnation' and 'inflation'. It describes an economy that faces rising prices even while output is not growing and unemployment is high.
• Why it is a problem: Ordinarily inflation is linked with a booming economy and unemployment with a slump. Stagflation breaks this link — prices rise while production and employment stagnate, so policy makers cannot fight both at once (measures to curb inflation worsen unemployment and vice versa). …