One effect of inflation is that it is a tax that redistributes goods and services from
A)businesses to households.
B)government to businesses.
C)households and businesses to the government.
D)government to households.
E)investors to savers.

Question

Quizplus · Accepted Answer

Inflation acts like a tax by eroding the purchasing power of money held by households and businesses, effectively transferring wealth to the government, which benefits from paying back debt with devalued currency.

One Effect of Inflation Is That It Is a Tax