What is the main function of the financial system?

If demand and supply have the same elasticity, the buyer will pay _____ of a tax.

Fill in the blank(s) with the appropriate word(s).

Higher rates of inflation reduce spending because:

A. the Fed reacts to the higher inflation by lowering interest rates. B. the real value of money increases. C. the reduction in wealth, resulting from the reduced real value of money, restricts spending. D. resources are redistributed from low-spending households to high-spending households.