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Question 37 The Sacrifice Ratio is best defined as which of the following? Not yet answered Select one: Marked out of 1.5 O a. the sum of the inflation and unemployment rates Flag O b. the number of percentage points unemployment rises for each percentage point reduction in inflation question O c. the inflation rate divided by the change in output O d. the number of percentage points annual output falls for each percentage point reduction in inflation Question 38 Rational Expectations Theory suggests that, in the most extreme case, if policymakers are credibly committed to reducing inflation, and if rational people understand that commitment and quickly lower their inflation Not yet expectation, the Sacrifice Ratio could be as low as which of the following? answered Marked out of Select one: 1.5 O a. 3 Flag question O b. 1 O C.5 O d.0 Question 39 The Time Inconsistency of government policy implies which of the following? Not yet answered Select one: Marked out of 1.5 O a. The Bank of Canada coordinates its actions with elected officials. Flag O b. What policymakers say they will do is generally what they will do, but people don't believe them because of current policy. question O C. People always expect more inflation than policymakers claim they are trying to achieve. O d. When people expect that inflation will be low, it is harder for the Bank of Canada to increase output by increasing the money supply