Zero Inflation

question 9

Multiple Choice

Zero inflation

• A)might be dangerous because it could lead to times of deflation.
• B)would limit the flexibility of the labor market and so could at times raise unemployment.
• C)might make it impossible for the Central bank to lower the nominal interest rate at times.
• D)All of the above are correct.

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Definitions:

Sympathetic Nervous System

Part of the autonomic nervous system that activates the body's fight-or-flight response during perceived threats.

Stress

A physical, mental, or emotional factor that causes bodily or mental tension and may be a factor in disease causation.

Central

Pertaining to the main or most important parts; often used to describe core functions or areas within a system or body.

Autonomic Nervous System

The part of the nervous system that controls involuntary bodily functions such as heart rate, digestion, and breathing.