An economy must sacrifice 12 percent of GDP to eliminate its 12 percent inflation problem.Which of the following plans represents the "cold turkey" solution to inflation?

Question

Quizplus · Accepted Answer

The "cold turkey" solution to inflation involves a drastic one-time reduction in output to immediately eliminate the inflation problem. Option D is the only plan that fulfills this requirement by sacrificing 12 percent of GDP in one year. The other options involve spreading out the reduction over several years and are not considered a "cold turkey" approach.

An Economy Must Sacrifice 12 Percent of GDP to Eliminate