Zero inflation
A)might be dangerous because it could lead to rapidly increasing prices.
B)would limit the flexibility of the labor market and so could at times raise unemployment.
C)would make it easy for the Central bank to create negative real interest rates.
D)is impossible to achieve in the real world.

Question

Quizplus · Accepted Answer

Zero inflation can limit wage adjustments, making it harder for the labor market to respond to economic changes, potentially increasing unemployment.

Zero Inflation