Question

Read the scenario.

The citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same rate. The combination of these challenges has resulted in a decrease in overall demand, causing a decline in GDP.

According to the scenario, what is the greatest economic challenge that Country D is facing?

A) unemployment
B) stagflation
C) high production
D) high wages

Answer 1

The greatest economic challenge that country D faces is stagflation. It arises when the economy of a country is in economic recession and at the same time there is inflation. This concept comes from the speech in front of the House of Commons in 1965 by the then British Finance Minister Ian McLeod, who said that the United Kingdom was in a kind of "stagflation", combining the words inflation (inflation) and stagnation ( stagnation). Stagflation is the stagnation in the economic growth of a country, with a high level of unemployment and high inflation.

Answer 2

Answer:

The answer is B stagflation

Explanation: