What reflects a healthy economy?

What reflects a healthy economy?

• A. High unemployment alongside low inflation
• B. Stable inflation with high consumer spending
• C. High inflation paired with low interest rates
• D. Low unemployment and stable inflation

Answer: (D)

A healthy economy is characterized by low unemployment and stable inflation. Low unemployment indicates that a significant portion of the workforce is employed and contributing to economic productivity. This leads to increased consumer confidence and spending, which drives economic growth. Stable inflation means that the overall price level of goods and services is not experiencing excessive fluctuations. This provides consumers and businesses with predictability, allowing them to make informed financial decisions. When inflation is stable, it helps to maintain purchasing power, ensuring that wages keep pace with price changes. Combined, low unemployment and stable inflation create a favorable environment for both individuals and businesses, leading to sustainable economic growth and a higher standard of living. This contrasts with the other scenarios presented, which include elements indicative of economic instability, such as high unemployment or high inflation.

A healthy economy is characterized by low unemployment and stable inflation. Low unemployment indicates that a significant portion of the workforce is employed and contributing to economic productivity. This leads to increased consumer confidence and spending, which drives economic growth.

Stable inflation means that the overall price level of goods and services is not experiencing excessive fluctuations. This provides consumers and businesses with predictability, allowing them to make informed financial decisions. When inflation is stable, it helps to maintain purchasing power, ensuring that wages keep pace with price changes.

Combined, low unemployment and stable inflation create a favorable environment for both individuals and businesses, leading to sustainable economic growth and a higher standard of living. This contrasts with the other scenarios presented, which include elements indicative of economic instability, such as high unemployment or high inflation.