A national economy is currently experiencing a prolonged period of 'stagflation'. How is this macroeconomic condition best defined, and how would it typically impact a luxury eco-tourism company?

High inflation combined with rapid economic growth; leading to increased costs but higher sales.

Deflation combined with stagnant economic growth; leading to cheaper operational costs and higher margins.

High inflation combined with stagnant economic growth; leading to reduced discretionary spending and lower sales for the company.

Low interest rates combined with high employment; leading to a boom in luxury travel.