Refer to Figure 4-15. How much of the tax is paid by sellers?

When the government raises revenue by printing money, it imposes an "inflation tax" because the:

A. real value of money holdings falls. B. interest rate falls. C. difference between nominal and real interest rates becomes smaller. D. nominal value of money holdings falls.

Describe, in general terms, how an economist calibrates a macroeconomic model. What statistics can be usefully examined to see how well the model corresponds to the data?

What will be an ideal response?