A combination of slow economic growth and high inflation is called:

• A. Recession
• B. Stagnation
• C. Deflation
• D. Inflationary pressure

Answer: (D)

This scenario tests how growth and prices move together. When the economy grows slowly and prices are rising, you’re looking at inflationary pressure—the idea that inflation is present even though growth is weak. Recession would mean the economy is shrinking, which is a more severe drop in output than “slow growth.” Stagnation describes prolonged weak growth, but doesn’t inherently flag higher prices. Deflation is the opposite of what’s happening here, with falling prices. While the classic label for slow growth with inflation is stagflation, the option that best captures the situation among the choices is inflationary pressure, since it explicitly signals rising prices in a weak-growth environment.