If the money wage and other resource prices do not change when the price level rises by 10%...
What will be an ideal response?
there is movement along the short-run aggregate supply curve
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One advantage of using an inflation tax over other methods of tax collection is that:
A) inflation tax only affects individuals with a high income. B) people who evade other taxes also feel the burden of an inflation tax. C) the revenue from inflation tax is extremely high. D) the collection of inflation tax is more organized.
Covered interest arbitrage involves both
A) the purchase of a foreign asset and a forward contract in the market for foreign exchange. B) the purchase of a domestic asset and a spot contract in the market for foreign exchange. C) the sale of a foreign asset and the purchase of a forward contract in the market for foreign exchange. D) the sale of domestic stocks and the purchase of foreign bonds. E) None of the above.