Zero Inflation

question 40

Multiple Choice

Zero inflation

• A)might be dangerous because it could lead to rapidly increasing prices.
• B)would limit the flexibility of the labor market and so could at times raise unemployment.
• C)would make it easy for the Central bank to create negative real interest rates.
• D)is impossible to achieve in the real world.

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Definitions:

Inventory

Goods and materials held by a business for the purpose of sale or production.

Trade or Business

Trade or Business refers to any activity conducted for profit or livelihood, including goods and services production, buying, selling, or providing services.

Ordinary Loss

A loss incurred in the regular operation of a business or the sale of assets used in the business that can be fully deducted in the year it occurs.

Capital Loss

The loss incurred when a capital asset is sold for less than its purchase price.