<u>Low inflation is a sign of a healthy economy because it results in a steady rise in demand.</u>
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Further Explanation:
Inflation:
The increase in prices of goods and services due to increase in price index is termed as inflation. The value of currency of a country decreases in the case of inflation. Inflation is a gradual process and does not take place suddenly.
The low rate of inflation signifies that the economy is growing and the value of currency is not decreasing. The demand increases in the economy and it then increases the economic growth.
The high rate of inflation specifies that the price index is high. The incomes are not growing as per growth in prices of commodities. Inflation is said to be lower when the wages increase according to the increase in the prices of all goods and services.
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Answer details:
Grade: Middle School
Subject: Economics
Chapter: Inflation
Keywords:
Low inflation, sign, healthy economy, because, it results, steady rise, in demand, according to the rise of inflation, considered low, prices of goods and services, high unemployment and a low level of production.
