Question

write a note on sacrifice ratio​

Answer 1

The sacrifice ratio is an economic ratio that measures the effect of rising and falling inflation on a country's total production and output. Costs are associated with the slowing of economic output in response to a drop in inflation. When prices fall, companies are less incentivized to produce goods and may cut back on production. The ratio measures the loss in output per each 1% change in inflation. By examining a country's historic sacrifice ratios through time, a governing body can predict what effect their fiscal policies will have on the country's output.