Problem
1. Why was the ‘shoe leather cost' of inflation so called? What other costs are there of anticipated inflation?
2. The model to which new classical economists applied rational expectations is described in the text as ‘market clearing' and ‘monetarist'. How are these descriptions related? What must have been the principal assumptions of the model?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.