If the money held by the public is $3 billion and inflation is 6%, the inflation tax is:
A) $3.18 billion.
B) $50 billion.
C) $180 million.
D) $1.8 billion.

Question

Quizplus · Accepted Answer

The inflation tax on the money held by the public can be calculated by multiplying the amount of money held ($3 billion) by the inflation rate (6%). This calculation gives $3 billion * 0.06 = $180 million.

If the Money Held by the Public Is $3 Billion