Asked by Mandalyns Watters on Jun 29, 2024
Verified
A low sacrifice ratio would make a central bank less willing to reduce the inflation rate.
Low Sacrifice Ratio
A condition indicating that an economy can reduce inflation with a relatively small decrease in economic output or increase in unemployment.
Inflation Rate
The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.
Central Bank
An institution that manages a country's currency, money supply, and interest rates. Central banks also oversee the commercial banking system of their respective countries.
- Gain an understanding of the crucial function the sacrifice ratio plays in diminishing inflation.
Verified Answer
ZK
Zybrea KnightJul 05, 2024
Final Answer :
False
Explanation :
A low sacrifice ratio indicates that only a small amount of economic output is lost for each unit reduction in inflation, making a central bank more willing to reduce the inflation rate because the cost in terms of lost output is lower.
Learning Objectives
- Gain an understanding of the crucial function the sacrifice ratio plays in diminishing inflation.