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Rzqust [24]
3 years ago
15

The sacrifice ratio is the A. sum of the inflation and unemployment rates. B. number of percentage points annual output falls fo

r each percentage point reduction in inflation. C. inflation rate divided by the unemployment rate. D. number of percentage points unemployment rises for each percentage point reduction in inflation.
Social Studies
1 answer:
fiasKO [112]3 years ago
8 0

Answer:

B. number of percentage points annual output falls for each percentage point reduction in inflation.  

Explanation:

The Sacrifice Rate is the loss of output due to the fight against inflation, and can be expressed as how much product is lost to reduce inflation by 1 percentage point.

The Sacrifice Rate is a proposition by economist Robert Lucas Jr, who noted that the slowdown in long-term inflation is associated with a reduction in the production of goods and services for a certain period until economic agents adapt to the new reality. pricing and restructuring their expectations of the economy. Therefore, the social cost of fighting inflation is a reduction in GDP and an increase in the unemployment rate.

Based on this context, we can conclude that the correct answer to your question is the letter B.

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svet-max [94.6K]
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