High and volatile inflation decreases economic efficiency through all of the following channels EXCEPT by
A) distorting incentives through interaction with the tax laws.
B) obscuring information transmitted by prices.
C) inducing people to minimize cash holdings.
D) reducing the purchasing power of cash holdings.
E) interfering with long-term planning.
Correct Answer:
Verified
Q172: Inflation _ the signals sent by price
Q173: If workers and employers agree to a
Q174: For a given nominal interest rate,an unexpectedly
Q175: If both the lender and borrower agree
Q176: If both the lender and borrower agree
Q178: When inflation turns out to be different
Q179: Increases in the rate of inflation will
Q180: Unexpectedly high inflation _ borrowers and _
Q181: Deflation is not a sensible policy goal
Q182: According to the price distortion hypothesis
A) inflation
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