Canadian economists who favour 'moderate' over 'low' inflation,that is,inflation in the range of 3% to 6% per year rather than lower,offer all of the following reasons for their preference EXCEPT
A) low or zero inflation can produce lower economic growth.
B) low inflation impairs real wage flexibility and hence economic efficiency.
C) the central bank looses the ability to fight recessions by cutting the nominal interest rate,when inflation and the nominal interest rate are already low.
D) a rapidly growing economy can be expected to naturally produce some inflation which should not be smothered by reining in the interest rate.
E) businesses are net borrowers and,therefore,dislike low inflation.
Correct Answer:
Verified
Q162: The real rate of return on holding
Q163: Unexpectedly low inflation _ borrowers and _
Q164: It is difficult to engage in long-term
Q165: Some economists think that even moderate inflation
Q166: If workers and employers agree to a
Q168: The Canadian recessions of the early 1980s
Q169: If a borrower and lender agree to
Q170: If,in a given period,the rate of inflation
Q171: If you borrow money at what you
Q172: Inflation _ the signals sent by price
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents