Question

The graph shows changes in the US economy between 1971 and 2001.

A graph titled Change in U S Unemployment and Inflation from 1971 to 2001 has the year on the x-axis and percentage change on the y-axis, from 0 to 8 percent. From 1971 to 1976, both unemployment rate and inflation increased. From 1981 to 2001, both decreased.

According to the graph, 1971 to 1976 was a period of stagflation due to

rising unemployment and inflation.
falling unemployment and inflation.
rising unemployment and falling inflation.
falling unemployment and rising inflation.

Answer 1

rising unemployment and inflation.

Stagflation is the combination of economic stagnation (rising unemployment) and rising inflation, which the graph shows from 1971–1976.