Some Countries Have Had High Inflation for a Long Time

question 30

Multiple Choice

Some countries have had high inflation for a long time.Others have had low or moderate inflation for a long time.Which of the following,at least in theory,could explain why some countries would continue to have high inflation?

• A)High inflation countries have relatively small sacrifice ratios and so see no need to reduce inflation.
• B)Inflation reduction works best when it is unexpected,and people in high inflation countries would quickly anticipate any change in monetary policy.
• C)In a country where inflation has been high for a long time,people are likely to have found ways to limit the costs.
• D)In a country where inflation has been high for a long time,there are no costs to the inflation.

---

Definitions:

Fraudulent Misrepresentation

A false statement made knowingly or recklessly with the intent to deceive and induce another to part with something of value or to surrender a legal right.

Deceit

A tort that arises when a party suffers damage by acting upon a false representation made by a party with the intention of deceiving the other.

Valid Contract

An agreement between two parties that is recognized by law and is enforceable by the legal system.

Undue Influence

A state of affairs whereby a person is so influenced by another that the person’s judgment is not his or her own.