Typical Estimates of the Sacrifice Ratio Suggest That a One-Percentage-Point

question 33

Multiple Choice

Typical estimates of the sacrifice ratio suggest that a one-percentage-point reduction in the inflation rate requires

• A)a sacrifice of 5 percent of annual output.
• B)a sacrifice of 5 percent of government spending.
• C)an increase in the unemployment rate of 5 percentage points.
• D)a 5 percent increase in the government budget deficit.

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Definitions:

Division

A logical fallacy where one assumes that what is true of a whole must also be true of its parts.

Slippery Slope Argument

A logical fallacy that argues a relatively small first step will lead to a chain of related events culminating in some significant effect, often negative.

Strength Of Link

The degree to which two variables are related or associated with each other, often measured in statistical analyses.

Slippery Slope

The fallacy of arguing against a proposed action or policy by claiming, with insufficient evidence, that it will lead to a series of increasingly bad consequences.