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What is the inflation tax, and how might it explain the creation of inflation by a central bank?

Posted on November 7, 2022 by Shady

Management
Macroeconomic
Assignment 3 Questions: Chapter 15, 17 & 18

What is the inflation tax, and how might it explain the creation of inflation by a central bank? (2.5 Marks)
Suppose a resident of Canada buys some machine tools from a company in Japan. Explain why and in what directions this changes Canada net exports and Canada net capital outflow. (2.5 Marks)

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