The ratio of cumulative loss of GDP (as a result of disinflation policy) to the reduction of inflation…
The sacrifice ratio measures the cumulative output loss incurred in reducing inflation relative to the inflation reduction achieved. It summarizes the real cost of…
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The ratio of cumulative loss of GDP (as a result of disinflation policy) to the reduction of inflation that is actually achieved is __________.
Answer and explanation
Correct answer B
The sacrifice ratio measures the cumulative output loss incurred in reducing inflation relative to the inflation reduction achieved. It summarizes the real cost of disinflation rather than merely naming a general trade-off.
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Maharashtra and Goa SET (MH SET)