Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.1 shows how much of each good Jesse and April can paint in one hour. April's opportunity cost of painting one kite is painting

Inflation:

a. Never hurts the economy. b. Only hurts the economy as a whole when it is not expected. c. Never redistributes income and wealth. d. Hurts the economy when incentives are affected.

The Circular Flow Model:

a. Shows that inflation harms consumers and boosts business profitability. b. Proves that inflation reduces the purchasing power of consumers and does not affect businesses. c. Has no application to questions relating to inflation. d. Suggests that when the actual inflation was expected, it may not harm anyone.