Tax distortions refer to the cost of inflation that comes from:
A. the money, time, and opportunity used to change prices to keep pace with inflation.
B. the time, money, and effort one has to spend managing cash in the face of inflation.
C. being penalized via taxes for making more money in dollars, even though real purchasing power hasn't changed at all.
D. labor costs associated with inflation.
C. being penalized via taxes for making more money in dollars, even though real purchasing power hasn't changed at all.
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Hyperinflation usually starts when:
A. people start spending too much money. B. firms demand higher and higher prices for their goods. C. governments are forced to print money to finance their spending. D. fiscal deficits are small.
Protectionism may fail to reduce a current account deficit because it
A. depreciates the dollar. B. invites retaliation, which hurts exports. C. encourages exports. D. does not reduce imports.