Question

Which of the following would encourage faster economic growth?

Group of answer choices

high and variable inflation

low and variable inflation

low and stable inflation

high and stable inflation

Answer 1

Option C.

Low and Stable inflation rate in the economy would encourage faster economic growth because it would encourage increase in consumption expenditure by the consumers and would also raise investor sentiment in the economy because stable inflation rate is an indication of stable economic growth rate of the economy. Thus, faster economic growth can be achieved through low and stable inflation rate in the economy.