Which of the Following Is NOT a Cost of Anticipated

question 21

Multiple Choice

Which of the following is NOT a cost of anticipated inflation but arises only if inflation is unanticipated?

• A)Inflation interacts with the tax system to hurt savings and investment in physical capital.
• B)Inflation represents an implicit tax on holding money.
• C)Firms face menu costs of changing prices.
• D)Higher inflation leads to greater uncertainty about the future inflation rate.

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Definitions:

Boycott

A protest in which people refuse to buy, use, or participate in something as a way of expressing disapproval or forcing change.

Montesquieu

A French philosopher known for his articulation of the theory of separation of powers, which is implemented in many constitutions around the world.

Tyranny

A form of government in which a single ruler holds absolute power and often governs without regard for justice or the rights of citizens.

French Political

Relating to the politics of France, known for its semi-presidential system, bicameral legislature, and a history of both monarchy and republicanism.