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Some Economists Have Argued That Inflation During the 1970s Contributed

Question 116

Multiple Choice

Some economists have argued that inflation during the 1970s contributed to Canada's relatively slow growth rate during that period.What is the basis for this view?  


A)  Inflation usually lowers employment, thus inflation slowed growth at that time. 
B)  The inflation was anticipated, which was particularly harmful because cost-of-living increases were built into wage settlements, which only worsened the problem. 
C)  High and variable inflation rates increased uncertainty, which made business decisions more difficult. 
D)  Lenders were less interested in making short-term loans than in making long-term loans.

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