Question: how would you answer these 3 questions 11. If an economy always has inflation of 10 percent per year, which of the following costs of

 how would you answer these 3 questions 11. If an economy

how would you answer these 3 questions

always has inflation of 10 percent per year, which of the following

11. If an economy always has inflation of 10 percent per year, which of the following costs of inflation will the society NOT necessarily suffer from? a menu costs from more frequent price adjustment b. distortions from the taxation of nominal interest income c. shoeleather costs from reduced holdings of money d. arbitrary redistributions between debtors and creditors. 6. Since the early 1990s, U.S. net capital outflow (i.e. net foreign lending) has been a negative, meaning that foreigners were buying more capital assets from the United States than Americans were buying abroad. b. negative, meaning that Americans were buying more capital assets abroad than foreigners were buying from the United States. c. positive, meaning that foreigners were buying more capital assets from the United States than Americans were buying abroad. d. positive, meaning that Americans were buying more capital assets abroad than foreigners were buying from the United States. 7. According to the twin deficits mechanism, if taxes are cut without cutting government spending, then the short-run international effect will initially be a (net) capital and a trade a. inflow; deficit b. inflow; surplus c. outflow; deficit d. outflow; surplus

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