Question on: JAMB Economics - 2014

The correct answer is stagflation.

• Stagflation is a specific economic condition characterized by slow economic growth, relatively high unemployment, and rising prices (inflation). It represents a simultaneous occurrence of economic stagnation and inflation.
• Hyperinflation refers to a very high and accelerating rate of inflation, which is not necessarily linked to unemployment.
• Demand-pull inflation is caused by an increase in aggregate demand exceeding the economy's capacity to produce goods and services.
• Cost-push inflation arises from increases in the costs of production (e.g., wages, raw materials) that push up the general price level.