The inflation tax is

Question

Quizplus · Accepted Answer

The inflation tax refers to the revenue earned by the government through seigniorage, which is the difference between the face value of the currency and the cost of producing it. This is because when a government prints more money to finance its expenditures, it increases the money supply in the economy, which may lead to inflation. As a result, the value of money decreases, and the government earns a de facto tax on all its outstanding debts and currency in circulation.

The Inflation Tax Is