If the sacrifice ratio is five, a reduction in inflation from 7 percent to 3 percent would require ?

Question

If the sacrifice ratio is five, a reduction in inflation from 7 percent to 3 percent would require ?

Answer 1

A. a reduction in output of 20 percent
B. a reduction in output of 5percent
C. a reduction in output of 15 percent
D. a reduction in output of 35 percent

Correct Answer: a reduction in output of 20 percent ✔

Last Updated: June 18, 2019