Tax distortions refer to the cost of inflation that comes from:

A. the time, money, and effort one has to spend managing cash in the face of inflation.
B. the money, time, and opportunity used to change prices to keep pace with inflation.
C. being penalized via taxes for making more money in dollars, even though real purchasing power hasn't changed at all.
D. labor costs associated with inflation.


Answer: C

Economics

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