Inflation Below Zero Indicates Falling Cost of Living

Steps:

• Identify inflation rate trends in each country's diagram over the period.
• Recall that inflation measures average price changes; negative values (deflation) mean falling prices.
• Check for consistent negative inflation across the entire timeframe.
• Select the country with deflation throughout, signaling reduced cost of living.

Why D is correct:

• Deflation (negative inflation rate) directly lowers the cost of living by reducing average prices, per the consumer price index definition.

Why the others are wrong:

• A: Shows positive inflation, raising cost of living.
• B: Exhibits fluctuating but mostly positive inflation, not consistently falling.
• C: Displays zero or positive inflation, maintaining or increasing costs.

Final answer: D