Low and Stable Inflation

question 97

Multiple Choice

Low and stable inflation

• A)is important in order to have economic growth, since inflation and growth are positively correlated.
• B)is important in order to have economic growth, since inflation and growth are negatively correlated.
• C)is not important in order to have economic growth.
• D)is important in order to have economic growth, since economic growth and inflation are not correlated.
• E)is not important in order to have economic growth because there is a positive correlation between economic growth and inflation.

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Definitions:

Characteristics

Features or qualities that distinguish one thing from another, used to describe unique aspects of individuals, objects, or concepts.

Short-run Supply Curve

A graphical representation showing the quantity of goods and services that producers are willing to sell at each possible price level, over a short time period where some production factors are fixed.

Long-run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a long period, considering all possible changes in inputs and technology.

Elastic

Elastic refers to the responsiveness of the quantity demanded or supplied of a good or service to a change in its price, with high elasticity meaning significant responsiveness.