Globalization and trade:
A)Reduce inflation in the short run but not in the long run
B)Reduce inflation in the short run and in the long run
C)Increase inflation in the short run but not in the long run
D)Reduce inflation in the short run but increase inflation in the long run

Question

Quizplus · Accepted Answer

Globalization and trade can reduce inflation in the short run by increasing the supply of goods and services, which can lead to lower prices. However, in the long run, globalization and trade can also lead to higher inflation by increasing the demand for goods and services, which can lead to higher prices.

Globalization and Trade