Countries that employ an inflation tax do so because
A) the governme doesn't understand the causes and consequences of inflation.
B) government expenditures are high, and the government has inadequate tax collections and difficulty borrowing.
C) an inflation tax is the most progressive (paid by the rich) of all taxes.
D) an inflation tax is the most equitable of all taxes.
E) the government has a balanced budget.
Correct Answer:
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Q21: An example of a real variable is
A)the
Q22: According to the classical view, to prevent
Q23: Money demand depends on
A)the price level and
Q24: If a government supplies more money than
Q27: If the nominal interest rate is 6
Q27: The velocity of money is
A)highly unstable.
B)impossible to
Q28: The nominal demand for money
A)does not depend
Q29: An inflation tax
A)is usually employed by governments
Q30: In the quantity theory of money
A)prices are
Q31: If real GDP falls and the nominal
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