A major problem with inflation is that after it starts:
A) it always stops quickly because the economy always corrects itself naturally.
B) it is easy to stop as long as it is fully expected.
C) it is difficult to stop without experiencing high unemployment.
D) it can never be stopped with any government policy.

Question

Quizplus · Accepted Answer

Inflation is difficult to stop without experiencing high unemployment because measures such as raising interest rates and reducing government spending can lead to a contraction in economic activity and therefore job losses. This is why central banks must carefully balance the need to control inflation with the potential negative impact on employment levels. Options A, B, and D are not correct as they all present inaccurate or impossible scenarios.

A Major Problem with Inflation Is That After It Starts