Economists Agree That at Least in the Short Run Disinflation

question 5

Multiple Choice

Economists agree that at least in the short run disinflation

• A)leads to a period of higher unemployment. They also agree that the costs of even moderate inflation is high.
• B)leads to a period of higher unemployment. They disagree about the cost of moderate inflation.
• C)leads to a period of lower unemployment. They also agree that the cost of even moderate inflation is high.
• D)leads to a period of lower unemployment. They disagree about the cost of moderate inflation.

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Definitions:

Former Soviet Union

The socialist state that existed from 1922 to 1991, comprised of Russia and several other republics, which disbanded, leading to the formation of independent countries.

Externalities

Economic side effects or consequences of commercial activities that affect other parties without being reflected in the cost of the goods or services involved.

Market Failure

A less than efficient allocation of resources.

Public Goods

Public goods refer to commodities or services that are made available to all members of a society, typically funded by the government, and characterized by non-excludability and non-rivalry in consumption.