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Read the passage and answer the question given below.Is it possible to decrease inflation without causing a recession and its concomitant increase in unemployment? The orthodox answer is “no.” whether they support the “inertia” theory of inflation (that today’s inflation rate is caused by yesterday’s inflation, the state of the economic cycle, and external influences such as import prices) or the “rational expectations” theory (that inflation is caused by workers’ and employers’ expectations, coupled with a lack of credible monetary and fiscal policies), most economists agree that tight monetary and fiscal policies, which cause recessions, are necessary to decelerate inflation. They point out that in the 1980’s, many European countries and the United States conquered high (by these countries’ standards) inflation, but only by applying tight monetary and fiscal policies that sharply increased unemployment. Nevertheless, some governments’ policymakers insist that direct controls on wages and prices, without tight monetary and fiscal policies, can succeed in decreasing inflation. Unfortunately, because this approach fails to deal with the underlying causes of inflation, wage and price controls eventually collapse, the hitherto-repressed inflation resurfaces, and in the meantime, though the policymakers succeed in avoiding a recession, a frozen structure of relative prices imposes distortions that do damage to the economy’s prospects for long-term growth.Q. Which of the following, if true, would most strengthen the author’s conclusion about the use of wage and price controls?a)Countries that repeatedly use wage and price controls tend to have lower long-term economic growth rates than do other countries.b)Countries that have extremely high inflation frequently place very stringent controls on wages and prices in an attempt to decrease the inflation.c)Some countries have found that the use of wage and price controls succeeds in decreasing inflation but also causes a recession.d)Policymakers who advocate the use of wage and price controls believe that these controls will deal with the underlying causes of inflation.e)Policymakers who advocate the use of wage and price controls are usually more concerned about long-term economic goals than about short-term economic goals.Correct answer is option 'A'. Can you explain this answer? for GMAT 2025 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about Read the passage and answer the question given below.Is it possible to decrease inflation without causing a recession and its concomitant increase in unemployment? The orthodox answer is “no.” whether they support the “inertia” theory of inflation (that today’s inflation rate is caused by yesterday’s inflation, the state of the economic cycle, and external influences such as import prices) or the “rational expectations” theory (that inflation is caused by workers’ and employers’ expectations, coupled with a lack of credible monetary and fiscal policies), most economists agree that tight monetary and fiscal policies, which cause recessions, are necessary to decelerate inflation. They point out that in the 1980’s, many European countries and the United States conquered high (by these countries’ standards) inflation, but only by applying tight monetary and fiscal policies that sharply increased unemployment. Nevertheless, some governments’ policymakers insist that direct controls on wages and prices, without tight monetary and fiscal policies, can succeed in decreasing inflation. Unfortunately, because this approach fails to deal with the underlying causes of inflation, wage and price controls eventually collapse, the hitherto-repressed inflation resurfaces, and in the meantime, though the policymakers succeed in avoiding a recession, a frozen structure of relative prices imposes distortions that do damage to the economy’s prospects for long-term growth.Q. Which of the following, if true, would most strengthen the author’s conclusion about the use of wage and price controls?a)Countries that repeatedly use wage and price controls tend to have lower long-term economic growth rates than do other countries.b)Countries that have extremely high inflation frequently place very stringent controls on wages and prices in an attempt to decrease the inflation.c)Some countries have found that the use of wage and price controls succeeds in decreasing inflation but also causes a recession.d)Policymakers who advocate the use of wage and price controls believe that these controls will deal with the underlying causes of inflation.e)Policymakers who advocate the use of wage and price controls are usually more concerned about long-term economic goals than about short-term economic goals.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for GMAT 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Read the passage and answer the question given below.Is it possible to decrease inflation without causing a recession and its concomitant increase in unemployment? The orthodox answer is “no.” whether they support the “inertia” theory of inflation (that today’s inflation rate is caused by yesterday’s inflation, the state of the economic cycle, and external influences such as import prices) or the “rational expectations” theory (that inflation is caused by workers’ and employers’ expectations, coupled with a lack of credible monetary and fiscal policies), most economists agree that tight monetary and fiscal policies, which cause recessions, are necessary to decelerate inflation. They point out that in the 1980’s, many European countries and the United States conquered high (by these countries’ standards) inflation, but only by applying tight monetary and fiscal policies that sharply increased unemployment. Nevertheless, some governments’ policymakers insist that direct controls on wages and prices, without tight monetary and fiscal policies, can succeed in decreasing inflation. Unfortunately, because this approach fails to deal with the underlying causes of inflation, wage and price controls eventually collapse, the hitherto-repressed inflation resurfaces, and in the meantime, though the policymakers succeed in avoiding a recession, a frozen structure of relative prices imposes distortions that do damage to the economy’s prospects for long-term growth.Q. Which of the following, if true, would most strengthen the author’s conclusion about the use of wage and price controls?a)Countries that repeatedly use wage and price controls tend to have lower long-term economic growth rates than do other countries.b)Countries that have extremely high inflation frequently place very stringent controls on wages and prices in an attempt to decrease the inflation.c)Some countries have found that the use of wage and price controls succeeds in decreasing inflation but also causes a recession.d)Policymakers who advocate the use of wage and price controls believe that these controls will deal with the underlying causes of inflation.e)Policymakers who advocate the use of wage and price controls are usually more concerned about long-term economic goals than about short-term economic goals.Correct answer is option 'A'. Can you explain this answer?.

Solutions for Read the passage and answer the question given below.Is it possible to decrease inflation without causing a recession and its concomitant increase in unemployment? The orthodox answer is “no.” whether they support the “inertia” theory of inflation (that today’s inflation rate is caused by yesterday’s inflation, the state of the economic cycle, and external influences such as import prices) or the “rational expectations” theory (that inflation is caused by workers’ and employers’ expectations, coupled with a lack of credible monetary and fiscal policies), most economists agree that tight monetary and fiscal policies, which cause recessions, are necessary to decelerate inflation. They point out that in the 1980’s, many European countries and the United States conquered high (by these countries’ standards) inflation, but only by applying tight monetary and fiscal policies that sharply increased unemployment. Nevertheless, some governments’ policymakers insist that direct controls on wages and prices, without tight monetary and fiscal policies, can succeed in decreasing inflation. Unfortunately, because this approach fails to deal with the underlying causes of inflation, wage and price controls eventually collapse, the hitherto-repressed inflation resurfaces, and in the meantime, though the policymakers succeed in avoiding a recession, a frozen structure of relative prices imposes distortions that do damage to the economy’s prospects for long-term growth.Q. Which of the following, if true, would most strengthen the author’s conclusion about the use of wage and price controls?a)Countries that repeatedly use wage and price controls tend to have lower long-term economic growth rates than do other countries.b)Countries that have extremely high inflation frequently place very stringent controls on wages and prices in an attempt to decrease the inflation.c)Some countries have found that the use of wage and price controls succeeds in decreasing inflation but also causes a recession.d)Policymakers who advocate the use of wage and price controls believe that these controls will deal with the underlying causes of inflation.e)Policymakers who advocate the use of wage and price controls are usually more concerned about long-term economic goals than about short-term economic goals.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for GMAT. Download more important topics, notes, lectures and mock test series for GMAT Exam by signing up for free.

Here you can find the meaning of Read the passage and answer the question given below.Is it possible to decrease inflation without causing a recession and its concomitant increase in unemployment? The orthodox answer is “no.” whether they support the “inertia” theory of inflation (that today’s inflation rate is caused by yesterday’s inflation, the state of the economic cycle, and external influences such as import prices) or the “rational expectations” theory (that inflation is caused by workers’ and employers’ expectations, coupled with a lack of credible monetary and fiscal policies), most economists agree that tight monetary and fiscal policies, which cause recessions, are necessary to decelerate inflation. They point out that in the 1980’s, many European countries and the United States conquered high (by these countries’ standards) inflation, but only by applying tight monetary and fiscal policies that sharply increased unemployment. Nevertheless, some governments’ policymakers insist that direct controls on wages and prices, without tight monetary and fiscal policies, can succeed in decreasing inflation. Unfortunately, because this approach fails to deal with the underlying causes of inflation, wage and price controls eventually collapse, the hitherto-repressed inflation resurfaces, and in the meantime, though the policymakers succeed in avoiding a recession, a frozen structure of relative prices imposes distortions that do damage to the economy’s prospects for long-term growth.Q. Which of the following, if true, would most strengthen the author’s conclusion about the use of wage and price controls?a)Countries that repeatedly use wage and price controls tend to have lower long-term economic growth rates than do other countries.b)Countries that have extremely high inflation frequently place very stringent controls on wages and prices in an attempt to decrease the inflation.c)Some countries have found that the use of wage and price controls succeeds in decreasing inflation but also causes a recession.d)Policymakers who advocate the use of wage and price controls believe that these controls will deal with the underlying causes of inflation.e)Policymakers who advocate the use of wage and price controls are usually more concerned about long-term economic goals than about short-term economic goals.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Read the passage and answer the question given below.Is it possible to decrease inflation without causing a recession and its concomitant increase in unemployment? The orthodox answer is “no.” whether they support the “inertia” theory of inflation (that today’s inflation rate is caused by yesterday’s inflation, the state of the economic cycle, and external influences such as import prices) or the “rational expectations” theory (that inflation is caused by workers’ and employers’ expectations, coupled with a lack of credible monetary and fiscal policies), most economists agree that tight monetary and fiscal policies, which cause recessions, are necessary to decelerate inflation. They point out that in the 1980’s, many European countries and the United States conquered high (by these countries’ standards) inflation, but only by applying tight monetary and fiscal policies that sharply increased unemployment. Nevertheless, some governments’ policymakers insist that direct controls on wages and prices, without tight monetary and fiscal policies, can succeed in decreasing inflation. Unfortunately, because this approach fails to deal with the underlying causes of inflation, wage and price controls eventually collapse, the hitherto-repressed inflation resurfaces, and in the meantime, though the policymakers succeed in avoiding a recession, a frozen structure of relative prices imposes distortions that do damage to the economy’s prospects for long-term growth.Q. Which of the following, if true, would most strengthen the author’s conclusion about the use of wage and price controls?a)Countries that repeatedly use wage and price controls tend to have lower long-term economic growth rates than do other countries.b)Countries that have extremely high inflation frequently place very stringent controls on wages and prices in an attempt to decrease the inflation.c)Some countries have found that the use of wage and price controls succeeds in decreasing inflation but also causes a recession.d)Policymakers who advocate the use of wage and price controls believe that these controls will deal with the underlying causes of inflation.e)Policymakers who advocate the use of wage and price controls are usually more concerned about long-term economic goals than about short-term economic goals.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Read the passage and answer the question given below.Is it possible to decrease inflation without causing a recession and its concomitant increase in unemployment? The orthodox answer is “no.” whether they support the “inertia” theory of inflation (that today’s inflation rate is caused by yesterday’s inflation, the state of the economic cycle, and external influences such as import prices) or the “rational expectations” theory (that inflation is caused by workers’ and employers’ expectations, coupled with a lack of credible monetary and fiscal policies), most economists agree that tight monetary and fiscal policies, which cause recessions, are necessary to decelerate inflation. They point out that in the 1980’s, many European countries and the United States conquered high (by these countries’ standards) inflation, but only by applying tight monetary and fiscal policies that sharply increased unemployment. Nevertheless, some governments’ policymakers insist that direct controls on wages and prices, without tight monetary and fiscal policies, can succeed in decreasing inflation. Unfortunately, because this approach fails to deal with the underlying causes of inflation, wage and price controls eventually collapse, the hitherto-repressed inflation resurfaces, and in the meantime, though the policymakers succeed in avoiding a recession, a frozen structure of relative prices imposes distortions that do damage to the economy’s prospects for long-term growth.Q. Which of the following, if true, would most strengthen the author’s conclusion about the use of wage and price controls?a)Countries that repeatedly use wage and price controls tend to have lower long-term economic growth rates than do other countries.b)Countries that have extremely high inflation frequently place very stringent controls on wages and prices in an attempt to decrease the inflation.c)Some countries have found that the use of wage and price controls succeeds in decreasing inflation but also causes a recession.d)Policymakers who advocate the use of wage and price controls believe that these controls will deal with the underlying causes of inflation.e)Policymakers who advocate the use of wage and price controls are usually more concerned about long-term economic goals than about short-term economic goals.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Read the passage and answer the question given below.Is it possible to decrease inflation without causing a recession and its concomitant increase in unemployment? The orthodox answer is “no.” whether they support the “inertia” theory of inflation (that today’s inflation rate is caused by yesterday’s inflation, the state of the economic cycle, and external influences such as import prices) or the “rational expectations” theory (that inflation is caused by workers’ and employers’ expectations, coupled with a lack of credible monetary and fiscal policies), most economists agree that tight monetary and fiscal policies, which cause recessions, are necessary to decelerate inflation. They point out that in the 1980’s, many European countries and the United States conquered high (by these countries’ standards) inflation, but only by applying tight monetary and fiscal policies that sharply increased unemployment. Nevertheless, some governments’ policymakers insist that direct controls on wages and prices, without tight monetary and fiscal policies, can succeed in decreasing inflation. Unfortunately, because this approach fails to deal with the underlying causes of inflation, wage and price controls eventually collapse, the hitherto-repressed inflation resurfaces, and in the meantime, though the policymakers succeed in avoiding a recession, a frozen structure of relative prices imposes distortions that do damage to the economy’s prospects for long-term growth.Q. Which of the following, if true, would most strengthen the author’s conclusion about the use of wage and price controls?a)Countries that repeatedly use wage and price controls tend to have lower long-term economic growth rates than do other countries.b)Countries that have extremely high inflation frequently place very stringent controls on wages and prices in an attempt to decrease the inflation.c)Some countries have found that the use of wage and price controls succeeds in decreasing inflation but also causes a recession.d)Policymakers who advocate the use of wage and price controls believe that these controls will deal with the underlying causes of inflation.e)Policymakers who advocate the use of wage and price controls are usually more concerned about long-term economic goals than about short-term economic goals.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Read the passage and answer the question given below.Is it possible to decrease inflation without causing a recession and its concomitant increase in unemployment? The orthodox answer is “no.” whether they support the “inertia” theory of inflation (that today’s inflation rate is caused by yesterday’s inflation, the state of the economic cycle, and external influences such as import prices) or the “rational expectations” theory (that inflation is caused by workers’ and employers’ expectations, coupled with a lack of credible monetary and fiscal policies), most economists agree that tight monetary and fiscal policies, which cause recessions, are necessary to decelerate inflation. They point out that in the 1980’s, many European countries and the United States conquered high (by these countries’ standards) inflation, but only by applying tight monetary and fiscal policies that sharply increased unemployment. Nevertheless, some governments’ policymakers insist that direct controls on wages and prices, without tight monetary and fiscal policies, can succeed in decreasing inflation. Unfortunately, because this approach fails to deal with the underlying causes of inflation, wage and price controls eventually collapse, the hitherto-repressed inflation resurfaces, and in the meantime, though the policymakers succeed in avoiding a recession, a frozen structure of relative prices imposes distortions that do damage to the economy’s prospects for long-term growth.Q. Which of the following, if true, would most strengthen the author’s conclusion about the use of wage and price controls?a)Countries that repeatedly use wage and price controls tend to have lower long-term economic growth rates than do other countries.b)Countries that have extremely high inflation frequently place very stringent controls on wages and prices in an attempt to decrease the inflation.c)Some countries have found that the use of wage and price controls succeeds in decreasing inflation but also causes a recession.d)Policymakers who advocate the use of wage and price controls believe that these controls will deal with the underlying causes of inflation.e)Policymakers who advocate the use of wage and price controls are usually more concerned about long-term economic goals than about short-term economic goals.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice GMAT tests.