Economists Agree That at Least in the Short Run Disinflation

question 5

Multiple Choice

Economists agree that at least in the short run disinflation

• A)leads to a period of higher unemployment. They also agree that the costs of even moderate inflation is high.
• B)leads to a period of higher unemployment. They disagree about the cost of moderate inflation.
• C)leads to a period of lower unemployment. They also agree that the cost of even moderate inflation is high.
• D)leads to a period of lower unemployment. They disagree about the cost of moderate inflation.

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Definitions:

Double-declining-balance

An accelerated method of depreciation which double the rate of normal depreciation, reducing the value of assets more quickly.

Depreciation Expense

The yearly allocation of the cost of an asset over its useful life, reflecting the asset's usage and wear and tear over time.

Book Value

The net value of a company's assets minus its liabilities and intangible assets, often used to estimate a company's worth in liquidation scenarios.

Total Asset Turnover

A financial ratio that measures a company's efficiency in using its assets to generate sales or revenue, calculated as sales divided by total assets.