Some Countries Have Had High Inflation for a Long Time

question 89

Multiple Choice

Some countries have had high inflation for a long time. Others have had low or moderate inflation for a long time. Which statement, 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) Persistently low inflation has costs in terms of high unemployment.

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Definitions:

Spike

A sudden, sharp increase or peak in the magnitude of a variable, often used in the context of electrical voltage or signals.

Low Values

Refers to measurements or quantities that are significantly below average or expected levels.

Voltmeter

An instrument used for measuring electrical potential difference between two points in an electric circuit.

Analog Meter

A measuring instrument with a moving pointer that displays readings on a graduated scale, used for measuring physical quantities like voltage or current.