Question

Some countries have had high inflation for a long time. Others have had low or moderate inflation for a long time. Which of the following, at least in theory, could explain why some countries would continue to have high inflation?

a. High inflation countries have relatively small sacrifice ratios and so see no need to reduce inflation.
b. Inflation reduction works best when it is unexpected, and people in high inflation countries would quickly anticipate any change in monetary policy
c. In a country where inflation has been high for a long time, people are likely to have found ways to limit the costs.
d. All of the above are correct.

Answer 1

d. All of the above are correct.

Step-by-step explanation:

Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over some period of time. High inflation in a country is a function of the rate at which the goods and services increases. From the options, it shows reasons why some countries would continue to have high inflation.