An Economy Must Sacrifice 12 Percent of GDP to Eliminate

Multiple Choice

An economy must sacrifice 12 percent of GDP to eliminate its 12 percent inflation problem.Which of the following plans represents the "cold turkey" solution to inflation?

A) Reduce output by 1 percent for 12 years.
B) Reduce output by 2 percent for 6 years.
C) Reduce output by 4 percent for 3 years.
D) Reduce output by 12 percent for 1 year.