Which Costs of Inflation Could the Government Reduce Without Reducing

question 20

Multiple Choice

Which costs of inflation could the government reduce without reducing inflation?

• A)shoeleather and menu costs
• B)menu costs and relative price variability
• C)unintended changes in tax liabilities and arbitrary redistributions of wealth
• D)none of the above is correct.

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Definitions:

Duty

A moral or legal obligation to perform or refrain from performing a certain action.

Rescind

To revoke, cancel, or repeal a contract, agreement, or law, making it as though it never existed.

Tenant

An individual or entity that occupies property or land rented from a landlord or owner.

Overcharges

The act of charging someone more than the fair or agreed upon price for goods or services.