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If the Sacrifice Ratio Is 2,reducing the Inflation Rate from 4

Question 20

Multiple Choice

If the sacrifice ratio is 2,reducing the inflation rate from 4 percent to 2 percent would


A) cost 1 percent of annual output.
B) cost 4 percent of annual output.
C) imply that unemployment would rise by 1%.
D) imply that unemployment would rise by 4%.

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