The correct answer is option 1, which states that high growth will lead to inflation.
Inflation refers to a general increase in prices of goods and services over a period of time. When an economy experiences high economic growth, it typically leads to an increase in consumer demand for products and services. This increased demand can lead to a situation where demand exceeds supply, causing prices to rise.
On the other hand, option 2 states that high growth will lead to deflation. This statement is incorrect. Deflation is the opposite of inflation, where there is a decrease in the general price level of goods and services. It is rare for high economic growth to lead to deflation, as high growth usually indicates a robust economy with increasing economic activity, demand, and spending, which are factors that contribute to inflation.
Therefore, option 1 is the correct statement, and option 2 is incorrect.