The term stagflation refers to:
a. a simultaneous reduction in output and the price level.
b. a simultaneous increase in output and the price level.
c. a decline in the price level accompanied by increases in real output and employment.
d. an increase in the price level accompanied by decreases in real output and employment.
e. a simultaneous increase in both the trade deficit and the budget deficit.
Question 2
An oligopolist operating with a kinked demand curve would expect rivals to match both its price increases and price decreases.
a. True
b. False
Indicate whether the statement is true or false
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