Which of the following is NOT a characteristic of a healthy economy?

Which of the following is NOT a characteristic of a healthy economy?

• A. Low unemployment
• B. Stable prices
• C. Excessive inflation
• D. Balanced trade

Answer: (C)

A healthy economy is typically characterized by several key features, each contributing to overall stability and growth. One of those important characteristics is low unemployment, which indicates that a majority of the labor force is engaged in productive work, thus leading to higher consumer spending and economic growth. Stable prices are another hallmark of a robust economy. Price stability means that inflation is kept under control, allowing consumers and businesses to make financial decisions with confidence. Excessive inflation, on the other hand, erodes purchasing power and creates uncertainty, which is detrimental to economic health. Balanced trade, where a nation's imports and exports are relatively balanced, also plays a role in a healthy economy. A consistent trade imbalance can lead to various economic problems, including increased debt and diminished currency value. The presence of excessive inflation disrupts these positive characteristics. It can lead to a wide range of economic issues, including decreased savings, uncertainty in investment, and potential recessionary pressures, thereby indicating an unhealthy economy. Therefore, excessive inflation is not a characteristic of a healthy economy because it contradicts the principles of stability and growth that are essential for economic well-being.

A healthy economy is typically characterized by several key features, each contributing to overall stability and growth. One of those important characteristics is low unemployment, which indicates that a majority of the labor force is engaged in productive work, thus leading to higher consumer spending and economic growth.

Stable prices are another hallmark of a robust economy. Price stability means that inflation is kept under control, allowing consumers and businesses to make financial decisions with confidence. Excessive inflation, on the other hand, erodes purchasing power and creates uncertainty, which is detrimental to economic health.

Balanced trade, where a nation's imports and exports are relatively balanced, also plays a role in a healthy economy. A consistent trade imbalance can lead to various economic problems, including increased debt and diminished currency value.

The presence of excessive inflation disrupts these positive characteristics. It can lead to a wide range of economic issues, including decreased savings, uncertainty in investment, and potential recessionary pressures, thereby indicating an unhealthy economy.

Therefore, excessive inflation is not a characteristic of a healthy economy because it contradicts the principles of stability and growth that are essential for economic well-being.