What Is an Advantage of Mild Inflation According to Some

question 35

Multiple Choice

What is an advantage of mild inflation according to some economists?

• A) It helps to close the GDP gap.
• B) It reduces the inflation premium.
• C) It makes it easier for firms to adjust real wages downward as demand for their products falls.
• D) It reduces frictional, structural, and cyclical unemployment in the economy to make the economy more productive.

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Definitions:

Reaffirmation Agreement

An agreement in which the debtor agrees to pay a debt even though it could have been discharged in bankruptcy.

Discharged Debt

Debt that has been formally released or forgiven, relieving the debtor of any further responsibility to repay it.

Trustee

An individual or company responsible for managing and overseeing assets or property on behalf of another party.

Chapter 7 Bankruptcy

A provision of the bankruptcy code that allows individuals and businesses to discharge or eliminate most of their debts through the liquidation of assets.