Stopping inflation
A) can only benefit the economy, because the price level will be reduced.
B) may be costly, if the inflation is stopped by inducing a recession.
C) may be costly, but the benefits of stopping inflation will always outweigh the costs of such actions.
D) will have no benefits or costs associated with it.

Question

Quizplus · Accepted Answer

Stopping inflation may have costs if it is done by inducing a recession, which can be harmful to the economy. However, the benefits of stopping inflation depend on the circumstances, and may not always outweigh the costs. Therefore, option A is incorrect. Option C is too general, and depends on the specific situation, so cannot be universally correct. Option D is incorrect because stopping inflation can have both benefits and costs.

Stopping Inflation