Sacrifice Ratio
An economic ratio that measures the costs associated with slowing down economic output to change inflationary trends. The ratio is calculated by taking the cost of lost production and dividing it by the percentage change in inflation, and its quotient gives the loss of output per 1% change in inflation:
Investopedia Says:
If inflation is becoming a problem, central banks will try to cool economic growth in a bid to reduce inflationary pressures. However, this reduction in output costs the economy in the short term, and the sacrifice ratio tries to measure that cost.
Related Links:
What causes inflation? How does it affect your investments and standard of living? This tutorial has the answers. All About Inflation
Learn how governments adjust taxes and government spending to moderate the economy. What Is Fiscal Policy?
They print money, they control inflation, and much, much more. All you need to know about central banks is here. What Are Central Banks?
The economy has a large impact on the market, so investors should know how to interpret these eleven indicators. Economic Indicators to Know
Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more! Economics Basics





