Which of the following scenarios is consistent with typical estimates of the sacrifice ratio?
a. Inflation is reduced from 4 percent to 1 percent, and annual output falls by 10 percent.
b. Inflation is reduced from 6 percent to 4 percent, and annual output falls by 10 percent.
c. Inflation is reduced from 8 percent to 5 percent, and annual output falls by 9 percent.
d. Inflation is reduced from 3 percent to 2 percent, and annual output falls by 3 percent.
b
You might also like to view...
Refer to Figure 4-1. If the market price is $4.00, what is the maximum number of ice cream cones that Kendra will buy?
A) 0 B) 2 C) 3 D) 4
What would be the best description of what we assume about money prices in the short run?
A) Money prices of goods and services vary. B) Money prices of goods and services not related to each other. C) Money prices of goods are fixed. D) Money prices of services are fixed. E) Money prices of goods and services are only temporarily fixed.