In the presence of inflation in the U.S., accountants incorrectly measure firms' earnings but the tax code correctly measures real incomes.

Name: In the presence of inflation in the U.S., accountants incorrectly measure firms' earnings but the tax code correctly measures real incomes.
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Question

Quizplus · Accepted Answer

Both accountants and the tax code typically measure incomes in nominal terms, not adjusting for inflation, which can lead to an overstatement of real incomes and earnings during inflationary periods.

In the Presence of Inflation in the U