1. A primer on the cost of inflation a. Explain why moderate levels of anticipated inflation need not produce adverse eco- nomic effects. b. Explain the differential impact of unanticipated changes in the inflation rate on bor- rowers and lenders. Repeat the exercise for firms and their employees. c. Explain why high and volatile levels of inflation may distort economic decisions and reduce investment. d. Explain why inflation is often called a silent and regressive tax