Which of These Is Not a Reason Why Economies Should

question 95

Multiple Choice

Which of these is not a reason why economies should aim for 2 to 3 percent inflation?

• A) It helps firms to more easily adjust real wages
• B) It allows a margin of error for those deciding on the money supply
• C) It allows the Fed to more easily engage in expansionary monetary policy
• D) It increases the real wage of workers

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