If a Central Bank Reduced Inflation by 2 Percentage Points

question 41

Multiple Choice

If a central bank reduced inflation by 2 percentage points and that made output fall by 3 percentage points for 2 years and the unemployment rate rises from 3 percent to 5 percent for 2 years,the sacrifice ratio is

• A)1.
• B)2.
• C)3.
• D)None of the above is correct.

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Definitions:

Required Rate of Return

The lowest expected yield an investor anticipates from a specific investment, considering its associated risk.

Growth Rate

The rate at which a company's earnings or economy expands over a specific period.

Dividend

A part of a firm's profits shared with its stockholders, usually as cash payments or extra shares.

Rate of Return

The beneficial or adverse change in an investment's valuation over a particular duration, indicated as a percentage of the initial capital.