The inflation tax is an:
A)implicit tax on the holders of cash and the holders of assets specified in real terms.
B)implicit tax on the holders of cash and the holders of assets specified in nominal terms.
C)explicit tax on wealth.
D)explicit tax on firms that raise their prices.

Question

Quizplus · Accepted Answer

The inflation tax refers to the loss of value in cash and assets specified in nominal terms due to inflation. It is considered an implicit tax because it reduces purchasing power without being a direct, legislated tax.

The Inflation Tax Is An