If a Rapid Disinflation Has a Lower Sacrifice Ratio Than

question 4

Multiple Choice

If a rapid disinflation has a lower sacrifice ratio than a slow disinflation,then reducing inflation is best accomplished by

• A)gradualism.
• B)increasing money growth.
• C)reducing interest rates.
• D)a cold-turkey approach.

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Definitions:

Unfavourable Variance

A financial term referring to a situation where actual costs are higher than planned or budgeted costs, or actual revenue is lower than forecasted revenue.

Standard Costing

A cost accounting technique that uses predetermined costs for assessing the performance of processes and employees by comparing these standard costs against the actual costs incurred.

Seasonal Pattern

The fluctuation in data or activities that occur regularly each year in a predictable manner.

Stable Product Costs

Costs that remain consistent over time without significant fluctuations, making budgeting and pricing strategies more predictable.