In an economy with a 10 percent inflation rate and a $560 billion real money supply,the real inflation tax revenue is equal to

Name: In an economy with a 10 percent inflation rate and a $560 billion real money supply,the real inflation tax revenue is equal to
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Question

Quizplus · Accepted Answer

The real inflation tax revenue is calculated by multiplying the inflation rate and the real money supply. Therefore, the real inflation tax revenue in this economy would be 10% of $560 billion which is $56 billion. Option A is the correct answer.

In an Economy with a 10 Percent Inflation Rate and a $560