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If an economy is said to be in a period of stagnation what does this indicate?
LowKeygp9976
An economy which is in stagnation can mean several things depending on how long and deep the stagnation is. Deep is relevant because stagnating economies dig themselves into deep holes that may take many years to return to normal growth. A stagnant economy can create economic, social and political problems as part of the problem could be inflation or deflation. Either one can have devastating effects on a nation. Unemployment, or higher employment with lower wages combined with higher prices can be an untenable situation.
Stagnation implies no growth which negatively affects stock markets, pension funds and personal investments.
In less developed nations, political unrest can lead to violence. Less so in a developed modern nation.
Social problems can also result because an economy not moving creates a situation where high school and college graduates can find no employment at all. There is no index to measure the number of graduates seeking work but not finding any.
Wiki User
∙ 8y ago
Wiki User
∙ 9y agoIf an economy is in a period of stagnation, this indicates not enough new jobs are being created. It also means not enough new home construction is underway, and wages are not rising.
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