Suppose That Reducing Inflation 3 Percentage Points Would Cost a Country

question 194

Multiple Choice

Suppose that reducing inflation 3 percentage points would cost a country 12 percent of annual output. What is this country's sacrifice ratio?

• A)3
• B)3.5
• C)4
• D)12

---

Definitions:

Institutional Change

The process by which institutions evolve and adapt over time, often in response to changes in external conditions or internal dynamics.

Developing Nations

Countries with a less developed industrial base and a low Human Development Index relative to other countries, often characterized by a lower standard of living, infrastructure, and educational level.

Land Reform

A series of measures intended to redistribute or regulate land ownership, often to favor less wealthy tenants, small farmers, or landless workers.

Vicious Circle

A complex chain of events that reinforces itself through a feedback loop, often leading to a negative or detrimental outcome.