The Squared Deviation of Inflation from Its Target Value Perhaps

question 16

Multiple Choice

The squared deviation of inflation from its target value perhaps zero) is employed as a measure of "inflation loss" because

• A) both positive deviations and negative deviations are costly.
• B) we need to square the measured deviations to produce appropriate units for the necessary comparison with "unemployment loss."
• C) it is a convenient measure routinely reported as output from statistical studies.
• D) all of the above.
• E) none of the above.

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