Cross-country studies that bolster the "zero inﬂation" view indicate that lower rates of inﬂation are associated with
A) lower rates of economic growth.
B) higher rates of economic growth.
C) recessions.
D) high rates of unemployment.

Question

Quizplus · Accepted Answer

Cross-country studies have shown that countries with lower rates of inflation tend to experience higher rates of economic growth. This is likely due to the fact that lower inflation rates help to maintain a stable economic environment, which is conducive to growth and investment. Inflation erodes the purchasing power of currency, leading to uncertainty and instability, which can hinder economic growth.

Cross-Country Studies That Bolster the "Zero Inﬂation" View Indicate That