A Central Bank Disinflates

question 167

Short Answer

A central bank disinflates. Output is 4% less for one year, 3% less the next year, and 2% less the third year. If inflation fell by 2 percentage points, what was the sacrifice ratio?

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Definitions:

Openness

A personality trait characterized by an appreciation for new experiences, creativity, and a willingness to explore novel ideas and values.

Big 5 Personality Trait

A theory in psychology that outlines five broad dimensions of human personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Conscientiousness

A characteristic of personality signified by being well-organized, reliable, and having a profound commitment to responsibilities.

Extroversion

A characteristic of personality marked by being outgoing, communicative, confident, and demonstrating significant emotional expression.