5
QuizMultiple Choice

Inflation and Stagflation

Question 5 • (Galli)WCA 2221 Civics/Economics 1st nine weeks 26-27

Typically, high inflation is a sign of

Answer
A
a healthy economy because it results from a fall in production costs.
B
a healthy economy because it results from a rise in consumer interest.
C
a struggling economy because wages cannot keep up with the increase in prices.
D
a struggling economy because it results from a fall in consumer interest.

Explanation

High inflation means prices are rising quickly. If wages do not rise as fast as prices, people can afford fewer goods and services, which can strain households and signal economic difficulty. So the best choice is “a struggling economy because wages cannot keep up with the increase in prices.”

AI-written and checked against the verified answer.

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