Question

Typically, low inflation is a sign of
Responses

a healthy economy because it results from a steady rise in demand.
a healthy economy because it results from a steady rise in demand.

a struggling economy because it results from a steady fall in supply.
a struggling economy because it results from a steady fall in supply.

a healthy economy because it results from a steady rise in supply.
a healthy economy because it results from a steady rise in supply.

a struggling economy because it results from a steady fall in demand.
a struggling economy because it results from a steady fall in demand.

Answer 1

a healthy economy because it results from a steady rise in supply.

Explanation: If production (supply) grows steadily—from higher productivity or more resources—prices stay stable or rise only slightly, producing low inflation even as the economy grows.