What would indicate strong aggregate supply in an economy?

Strong aggregate supply in an economy is characterized by the ability to produce goods and services to meet demand efficiently. Low unemployment rates and increased production are indicative of strong aggregate supply because they suggest that the economy is utilizing its labor resources effectively. When unemployment is low, it generally means that most of the workforce is employed and contributing to production, which can lead to higher output levels.

Increased production means that businesses are operating at or near their capacity, resulting in a greater availability of goods and services in the market. This scenario often correlates with increased productivity, technological advancements, and overall economic growth. The combination of these factors reflects a healthy aggregate supply side of the economy, which can help moderate inflation by ensuring that there are sufficient goods to meet consumer demand without causing excessive price increases.

The other options do not illustrate strong aggregate supply. Increased demand leading to higher prices relates more to demand side pressures than supply capabilities. Stable inflation rates can hint at a balanced economy, but do not specifically denote strong aggregate supply. Decreased foreign investment typically suggests a lack of confidence in the economy's growth prospects, which can negatively impact aggregate supply through reduced capital flow for production improvements.