What term describes a situation characterized by both high inflation and high unemployment?  A. Inflation  B. Deflation  C. Stagflation  D. U shape inflation

Breakdown of the Problem

1. Identify the economic terms provided in the options.
2. Understand the correlation between inflation and unemployment.

Relevant Concepts

• Inflation: A general increase in prices and fall in the purchasing value of money.
• Deflation: A decrease in the general price level of goods and services.
• Stagflation: A situation where the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high.
• U shape inflation: This is not a widely recognized economic term.

Analysis and Detail

1. Comparing Options:
   • A: Inflation refers to rising prices but does not include unemployment details.
   • B: Deflation is about decreasing prices, opposite to inflation.
   • C: Stagflation is specifically characterized by high inflation and high unemployment.
   • D: U shape inflation does not accurately describe an established economic condition.

Verify and Summarize

Upon analyzing the options, "C. Stagflation" is the correct term that describes the condition of simultaneous high inflation and high unemployment.

Final Answer

C. Stagflation