Typically, low inflation is a sign of:

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

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

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

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

Answer

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

Explanation

Inflation measures the rate at which prices for goods and services rise. When inflation is low, it often indicates weak consumer demand, meaning people are spending less money. This decrease in demand can slow down economic growth and lead to job losses or lower wages, signaling a struggling economy.

While moderate inflation is considered healthy as it reflects a growing economy, excessively low inflation or deflation (a drop in prices) can be harmful, as it discourages spending and investment.