A credible policy designed to lower inflation must throw the economy into recession.

Question

Quizplus · Accepted Answer

It is not necessary for a policy aimed at lowering inflation to result in a recession. There are various ways to lower inflation, such as increasing the interest rate, tightening monetary policy, or implementing supply-side reforms. These policies may initially cause a slowdown in economic growth, but they do not necessarily lead to a full-blown recession. It is possible to achieve a balance between controlling inflation and promoting economic growth.

A Credible Policy Designed to Lower Inflation Must Throw the Economy