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Table 1: Year TT u - u* (Y-Y*)/Y* de 20% 18 8 los NNG 52 0 33. Suppose that to bring an inflation rate of 20% down to 2% take

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Answer #1

Sacrifice ratio is given by

Lost GDP / total disinflation

(12% -2%) / ( 20% - 2%)

= 10%/18%

= 0.5

Select option E.

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