Consider the following ratio: the average annual inflation rate/the average annual money growth rate. A country with a ratio less than one would have:

Question

Quizplus · Accepted Answer

A ratio less than one indicates that the average inflation rate is less than the average rate of money growth. This suggests that the country's monetary policy is relatively tight and that there is less money circulating in the economy compared to the rate of inflation. However, this ratio alone does not provide information about unemployment or the state of the economy.

Consider the Following Ratio: the Average Annual Inflation Rate/the Average