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If a Central Bank Reduced Inflation by 4 Percentage Points

Question 84

Multiple Choice

If a central bank reduced inflation by 4 percentage points and this made output fall by 5 percent for one year and 3 percent for another year and the unemployment rate rise 2.5 percent above its natural rate for one year and 1.5 percent above its natural rate for another year,the sacrifice ratio was


A) 1.
B) 2.
C) 3.
D) None of the above is correct.

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