Which of the following is considered a benefit of inflation?
A)the option of a negative real interest rate
B)money illusion
C)seignorage
D)all of the above
E) none of the above

Question

Quizplus · Accepted Answer

Inflation can indeed offer benefits such as the possibility of a negative real interest rate, which can stimulate spending and investment; money illusion, where people might feel richer if their nominal wages increase, even if purchasing power remains the same; and seignorage, which is the profit made by a government by issuing currency, especially when the cost of producing it is less than its value.

Which of the Following Is Considered a Benefit of Inflation