Solved

(Consider This)Some Economists Believe That Modest Inflation,say 2-3 Percent,might Help

Question 104

Multiple Choice

(Consider This) Some economists believe that modest inflation,say 2-3 percent,might help reduce unemployment during recessions.What is the argument of economists who reject this idea?


A) Consumers would stop buying goods at higher prices,reducing demand,output,and employment.
B) Firms will pocket the profits resulting from higher prices and have no incentive to expand output and employment.
C) Wages and other costs would rise with the inflation,keeping firms from expanding employment.
D) Consumer spending would shift to cheaper imported goods,reducing domestic demand and employment.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents