Inflation is painful to stop because stopping it:
A) is virtually impossible.
B) involves decreasing people's wages.
C) requires decreasing the growth rate of the money supply,which typically leads to lower growth overall.
D) requires lowering interest rates,which hurts lenders but benefits borrowers.

Question

Quizplus · Accepted Answer

Decreasing the growth rate of the money supply, which is the most effective way to stop inflation, typically leads to lower economic growth overall. This can be painful because it can result in lost jobs, lower incomes, and reduced investment. In addition, it can be difficult to achieve because it requires cooperation from both private actors (banks and households) and public actors (the government).

Inflation Is Painful to Stop Because Stopping It