What is the relationship between the sacrifice ratio and the central bank's credibility?

a. Explain why a more credible policy of disinflation reduces the costs of disinflation.

b. Explain how you think the Bank of Canada might be able to make its disinflation policy more credible.

c. Can the Bank's policy responses to negative supply shocks influence the credibility it is likely to have when trying to end a sustained inflation? Explain.