Some Countries Have Had High Inflation for a Long Time

question 30

Multiple Choice

Some countries have had high inflation for a long time.Others have had low or moderate inflation for a long time.Which of the following,at least in theory,could explain why some countries would continue to have high inflation?

• A)High inflation countries have relatively small sacrifice ratios and so see no need to reduce inflation.
• B)Inflation reduction works best when it is unexpected,and people in high inflation countries would quickly anticipate any change in monetary policy.
• C)In a country where inflation has been high for a long time,people are likely to have found ways to limit the costs.
• D)In a country where inflation has been high for a long time,there are no costs to the inflation.

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Definitions:

False Statements

Assertions or claims that are not true, which in certain contexts, such as under oath in court or in financial reporting, can be illegal or fraudulent.

Undue Influence

A legal term referring to a situation where an individual is able to persuade another's decisions due to the relationship between the two parties.

Beneficiary

(1) A person who can expect to benefit from a relationship. (2) A person who receives, or will receive, the proceeds from an insurance policy or a will.

Witness

A person who sees an event, typically a crime or accident, and can give a first-hand account of it, or someone who is present at the signing of a document and signs it themselves to confirm this.