Proponents of zero inflation argue that reducing inflation implies which of the following?
A) that reducing inflation eventually reduces inflation expectations
B) that reducing inflation eventually raises real interest rates
C) that reducing inflation permanently decreases output
D) that reducing inflation permanently raises unemployment

Question

Quizplus · Accepted Answer

Reducing inflation can lead to lower inflation expectations, as people and businesses adjust their expectations based on the observed trend of stable or decreasing prices.

Proponents of Zero Inflation Argue That Reducing Inflation Implies Which