Category: Monetary, Fiscal And Incomes Policy, And Inflation

I- inflation weakens the creation of credit and capital markets
II- inflation distorts business behavior especially investment behavior
III- inflation increase the price of foreign goods relative to domestic goods
IV- Inflation imposes a tax on the holders of money

A. I and II only
B. III and IV only
C. I, II and IV only
D. I, II and III only

A. ratchet inflation
B. inflationary expectations
C. import substitution
D. demand pull inflation

A. incomes policy
B. Moral hazard
C. Wagner’s law
D. Fiscal policy

A. Taxes on international trade are the major source of tax revenue for low-income countries with poor administrative capacity
B. import duties can restrict luxury goods consumption
C. several LDCs have used value-added taxes to raise a substantial fraction of revenues
D. Cascade tax a form of progressive tax, is dominant in DCs

A. are central banks
B. are branches of commercial banks
C. use fiscal policy to influence GDP
D. loan money to most of LDC commercial banks

A. indirect taxes
B. direct taxes
C. inelastic
D. value-added tax