Imagine a scenario where a country experiences both inflation and deflation in different sectors. How might this affect the overall economy, and what could be a balanced policy approach?

• A. The economy will face a recession; a balanced policy could involve increasing tariffs.
• B. The economy will experience rapid growth; a balanced policy could involve reducing interest rates.
• C. The economy will remain stable; a balanced policy could involve increasing taxes.
• D. The economy may face instability; a balanced policy could involve targeted fiscal measures to stabilize prices.

Answer: (D)