What Is the Main Problem with Mild Inflation, According to Some

question 144

Multiple Choice

What is the main problem with mild inflation, according to some economists?

• A) It reduces the size of the GDP gap.
• B) It leads to unanticipated deflation.
• C) It increases frictional and structural unemployment in the economy.
• D) It diverts productive time toward activities to hedge against inflation.

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Definitions:

Conformity

The act of matching attitudes, beliefs, behaviors, and practices to societal or group norms.

Group's Attractiveness

The qualities or attributes of a group that draw members to it and contribute to their desire to belong and participate actively.

Cohesiveness

The degree to which members of a group or team are attracted to each other and motivated to stay in the group.

Ostracism

The social exclusion or expulsion of an individual from a group or society, often used as a form of social punishment.