If a Central Bank Reduces Inflation 2 Percentage Points and This

question 65

Multiple Choice

If a central bank reduces inflation 2 percentage points and this makes output fall 3 percentage points and unemployment rise 5 percentage points for one year,the sacrifice ratio is

• A)5/2.
• B)3/2.
• C)2/3.
• D)2/5.

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Definitions:

Hypothesis

A hypothesis is a proposed explanation or assumption for a phenomenon or a relationship between variables that can be tested through research and experimentation.

Null Hypothesis

The null hypothesis is a statement in statistics that suggests no significant effect or relationship exists in the population; it is the hypothesis that a statistical test aims to disprove.

Alternative Hypothesis

In hypothesis testing, the hypothesis that there is a significant difference between specified populations, which is considered if the null hypothesis is rejected.

Statistical Evidence

Data or information collected during an experimental or observational study that supports or refutes a statistical hypothesis.