Answer:
B. number of percentage points annual output falls for each percentage point reduction in inflation.
Step-by-step explanation:
The Sacrifice Rate is the loss of output due to the fight against inflation, and can be expressed as how much product is lost to reduce inflation by 1 percentage point.
The Sacrifice Rate is a proposition by economist Robert Lucas Jr, who noted that the slowdown in long-term inflation is associated with a reduction in the production of goods and services for a certain period until economic agents adapt to the new reality. pricing and restructuring their expectations of the economy. Therefore, the social cost of fighting inflation is a reduction in GDP and an increase in the unemployment rate.
Based on this context, we can conclude that the correct answer to your question is the letter B.