Stagflation

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Stagflation is a situation in which inflation exists side by side with recession and unemployment. It may occur due to inflation remaining unchecked for quite some time. So that it not only may raise input prices but also starts adversely affecting demand and consumption leading to a situation  of recession.

(Recession is characterized by slowing down of demand, GDP growth rate, Investment, Unemployment and Prevalence of business passivism. Technically it can be defined as a situation in which there is a negative growth of GDP for two successive quarters).

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