The sacrifice ratio is a measure of the

Name: The sacrifice ratio is a measure of the
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The sacrifice ratio is a measure of the cumulative loss in real GDP that a country must suffer in order to reduce inflation by 1%. It represents the trade-off between temporarily increased unemployment and the long-term benefit of lower inflation. Therefore, option E is the best choice because it refers to the loss in real GDP associated with disinflation, which is the focus of the sacrifice ratio.

The Sacrifice Ratio Is a Measure of the