The tendency for inflation to change relatively slowly from year to year in industrial countries is called:
A)the inflation gap.
B)inflation expectations.
C)inflation inertia.
D)potential inflation.

Question

Quizplus · Accepted Answer

Many economists have noted that inflation seems to be inertial, in the sense that it tends to remain roughly constant as long as the economy is at potential output and there are no external shocks to the price level. This phenomenon is known as "inflation inertia."

The Tendency for Inflation to Change Relatively Slowly from Year