Which statement best describes the sacrifice ratio for Canada?
A) It falls over a range of 1 to 3.
B) It falls over a range of 2 to 5.
C) It falls over a range of 3 to 6.
D) It falls over a range of 5 to 7.

Question

Quizplus · Accepted Answer

The sacrifice ratio for Canada falls over a range of 2 to 5, according to a study by the Bank of Canada. The sacrifice ratio measures the cost of reducing inflation (typically through monetary policy) in terms of lost output or increased unemployment. A higher sacrifice ratio indicates that a larger cost had to be paid to reduce inflation.

Which Statement Best Describes the Sacrifice Ratio for Canada