Other Things the Same,a Country That Decides to Reduce Inflation

question 85

Multiple Choice

Other things the same,a country that decides to reduce inflation will

• A)have a higher unemployment rate in the short run and the long run.
• B)have a higher unemployment rate only in the long run.
• C)have a higher unemployment rate only in the short run.
• D)not have a higher unemployment rate in either the short run or the long run.

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Definitions:

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in its price; it quantifies the sensitivity of demand relative to price changes.

Percent Change

A mathematical calculation that describes the degree of change over time, expressed as a percentage.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded for a given period.

Price Ceiling

a legally established maximum price for goods or services, aimed at keeping prices from rising to high levels.