Stagflation occurs when there is a raise in prices (inflation) at the same time as a stagnating economy. It can be demonstrated on the Aggregate supply/ aggregate demand graph by a leftward shift of the short-run aggregate supply curve.
The most common cause of stagflation is a “supply shock” when the supply of a material goes down dramatically. For example, if there were an oil embargo, the supply of oil would go down dramatically
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Explain The Phenomenon Of Stagflation Using An Aggregate Demand Aggregate Supply Graph And Give An Example Of A Cause
Explain The Phenomenon Of Stagflation Using An Aggregate Demand Aggregate Supply Graph And Give An Example Of A Cause
