Countries in which wages adjust rapidly to changes in the supply and demand for labor are likely to have ________ sacrifice ratio.
A)an infinite
B)a high
C)a low
D)a negative

Question

Quizplus · Accepted Answer

A low sacrifice ratio means that an economy can achieve a given reduction in inflation with a relatively small output loss. In countries where wages adjust rapidly to changes in the supply and demand for labor, the adjustment process is smoother, which leads to a lower sacrifice ratio. This is because the labor market can adjust more quickly to changes in economic conditions, reducing the need for large output losses to achieve lower inflation.

Countries in Which Wages Adjust Rapidly to Changes in the Supply