Suppose People in Countries That Have Had Persistently High Inflation

question 120

Multiple Choice

Suppose people in countries that have had persistently high inflation are sceptical about efforts to reduce inflation. What will happen to the short-run Phillips curve and the sacrifice ratio?

• A) The short-run Phillips curve remains to the left, and the sacrifice ratio will be low.
• B) The short-run Phillips curve remains to the left, and the sacrifice ratio will be high.
• C) The short-run Phillips curve remains to the right, and the sacrifice ratio will be low.
• D) The short-run Phillips curve remains to the right, and the sacrifice ratio will be high.

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Definitions:

Baby Boomers

Includes the generation of 76 million children born between 1946 and 1964.

Demographic Trends

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A rapid and large increase in the world or a specific area's population size.