a) If the Fed reduces inflation 1 percentage point and this makes output fall 5 percentage points and unemployment rises 2 percentage points for one year, what is the sacrifice ratio?
b) If the Fed reduces inflation 1 percentage point and this makes output fall 2 percentage points and unemployment rises 3 percentage points for six months, what is the sacrifice ratio?
c) If a central bank reduced inflation by 2 percentage points and that made output fall by 3 percentage points for 2 years and the unemployment rate rises from 3 percent to 5 percent for 2 years, what is the sacrifice ratio?
d) If the sacrifice ratio is 2, reducing the inflation rate from 10 percent to 6 percent, what would the percentage of annual output require to sacrifice?