Some countries have had high inflation for a long time.Others have had low or moderate inflation for a long time.Which of the following,at least in theory,could explain why some countries would continue to have high inflation?

Question

Quizplus · Accepted Answer

When inflation has been high for a long time, people are likely to have found ways to limit the costs. This can occur through various means, such as negotiating wages more frequently or adjusting prices to account for expected inflation. As a result, there may be less pressure on policymakers to reduce inflation, as it is perceived as less of a problem by the public. Option A is incorrect, as small sacrifice ratios would imply that reducing inflation is less costly and thus more desirable. Option B is incorrect, as it assumes that people in high inflation countries are better able to anticipate changes in monetary policy, which may not necessarily be true.

Some Countries Have Had High Inflation for a Long Time