A government that generates revenue mostly through an inflation tax faces the risk of:
A) rapidly falling prices. B) hyperinflation.
C) mass tax evasion. D) a sudden fall in revenue.
B
You might also like to view...
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Multiplier effects occur when there is a change in spending which does not depend on income. Spending which does not depend on income is referred to as
A) coincident spending. B) nominal spending. C) autonomous expenditures. D) induced expenditures.
A country's balance on current account will always equal its balance on capital account
a. True b. False Indicate whether the statement is true or false
When you think about investments in capital goods, the one category that is most important and, at least in the long run, yields the highest returns is investment in
a. infrastructure b. raw material extraction c. factories d. education and health e. machinery