Question

Read the scenario. The citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same rate. The combination of these challenges has resulted in a decrease in overall demand, causing a decline in GDP. According to the scenario, what is the greatest economic challenge that Country D is facing?

Answer 1

Answer:

The greatest economic challenge that Country D is facing is inflation

Explanation:

Rising prices, decreased demand, and declining GDP are the primary indicators of inflation, which affects the government, businesses, and individuals of Country D. When rising inflation rates are coupled with low productivity and declining GDP, stagflation results.

Answer 2

The citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same rate. The combination of these challenges has resulted in a decrease in overall demand, causing a decline in GDP. According to the scenario,  the greatest economic challenge that Country D is facing-is that of inflation

Explanation:

Inflation can be defined as  a quantitative measure of the rate at which the average price level of a goods and services in an economy increases over a period of time.

Inflation indicates a decrease in the purchasing power of a nation's currency

In Country D also similar situation is being witnessed

the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same rate. The combination of these challenges has resulted in a decrease in overall demand, causing a decline in GDP. According to the scenario,  the greatest economic challenge that Country D is facing-is that of inflation