Stagflation means a period were combination of inflation and stagnation happening at the same time. It means the rate of inflation reached the maximum capacity, which affects the national economy in a negative way. There are more workers and less jobs and the unemployment rate will be on the rise on the stock market. The condition of the economic and the living standard of the citizens will decrease rapidly in a short period of time.
United states of American experienced stagflation in the 1970s. The cause of stagflation was caused by high oil prices, rise of inflation, rise of unemployment and recession. For instance an article done by Hunt (2006) revealed that the major factor that caused stagflation in the 1970s of the downfall of the USA economy was the rising of oil prices. The USA economic growth during the early years of 1970s was gradually declining due to all the shortage of supply stocks. The USA economic crisis, stagflation, in the 1970s occurred within the economy in terms of consumer spending and consumer standard of living, there was a decrease in the consumption by customers. The government had …show more content…
Zimbabwe experienced high rates of inflation in 2007 and that lead into stagflation in 2009 due to the raising higher rate of unemployment. Their country’s economic went into a huge crisis and this caused the economy to weaken and lose its value. They were forced to enter hyperinflation period where the supply of money made by the government increased rapidly. Therefore the maximum capacity of the output can no longer go the limit, causing customers and business to spend quickly and the rise of good’s prices doubled everyday. Stagflation came to an end at the end when the Zimbabwe’s government decided to get rid of their currency altogether and either used US dollars or their neighboring countries currency. It then brought their economic back to a steady growth and eventually got out of
United states of American experienced stagflation in the 1970s. The cause of stagflation was caused by high oil prices, rise of inflation, rise of unemployment and recession. For instance an article done by Hunt (2006) revealed that the major factor that caused stagflation in the 1970s of the downfall of the USA economy was the rising of oil prices. The USA economic growth during the early years of 1970s was gradually declining due to all the shortage of supply stocks. The USA economic crisis, stagflation, in the 1970s occurred within the economy in terms of consumer spending and consumer standard of living, there was a decrease in the consumption by customers. The government had …show more content…
Zimbabwe experienced high rates of inflation in 2007 and that lead into stagflation in 2009 due to the raising higher rate of unemployment. Their country’s economic went into a huge crisis and this caused the economy to weaken and lose its value. They were forced to enter hyperinflation period where the supply of money made by the government increased rapidly. Therefore the maximum capacity of the output can no longer go the limit, causing customers and business to spend quickly and the rise of good’s prices doubled everyday. Stagflation came to an end at the end when the Zimbabwe’s government decided to get rid of their currency altogether and either used US dollars or their neighboring countries currency. It then brought their economic back to a steady growth and eventually got out of