Consider an Economy That Is in the Process of a Disinflation

question 29

Multiple Choice

Consider an economy that is in the process of a disinflation. Suppose that over a 2- year period, the rate of inflation is reduced from 6 percent to 1 percent. Over this same time, the cumulative loss in real GDP is $30 billion. Potential GDP is $600 billion. What is the sacrifice ratio?

• A)1
• B)2
• C)3
• D)4
• E)5

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Definitions:

Gut-dwelling

Referring to organisms that live within the digestive tract of a host, contributing to or affecting the host's health and nutritional status.

Ciliates

Single-celled or colonial protists with cilia.

Cellulose

A complex carbohydrate comprised of glucose units, forming the primary structural component of plant cell walls.

Brown Algae

Brown algae are a group of multicellular marine plants known for their distinctive brown or olive color, which results from the presence of the pigment fucoxanthin.