Question

stagflation occurs when high inflation combines with
high unemployment and a low level of production.
low unemployment and a high level of production.
a drop in buying power and a rise in workers wages.
a rise in buying power and a drop in workers wages.

Explanation:

Stagflation is defined as a period of high inflation, high unemployment, and stagnant (low) economic growth (production). The first option matches this definition: high inflation + high unemployment + low production. Other options are incorrect: low unemployment/high production (not stagflation), wage - buying power combinations don't define stagflation.

Answer:

A. high unemployment and a low level of production.