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Consider an Economy That Is in the Process of a Disinflation.Suppose

Question 62

Multiple Choice

Consider an economy that is in the process of a disinflation.Suppose that over a 2-year period,the rate of inflation is reduced from 6% to 1%.Over this same time,the cumulative loss in real GDP is $30 billion.Potential GDP is $600 billion.What is the sacrifice ratio?


A) 1
B) 2
C) 3
D) 4
E) 5

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