The inflation tax is
a) an additional income tax levied during periods of inflation to prevent government revenue from losing value
b) the movement of taxpayers into higher tax brackets due to inflation
c) the reduction in the value of cash due to inflation
d) the federal sales tax on goods whose prices rise by more than the general inflation rate
e) a tax on trucking, so called because of the inflation of the tires
c) the reduction in the value of cash due to inflation
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An inflationary gap exists when consumers
A. are saving more than businesses are investing. B. and businesses are purchasing less than the economy is capable of producing. C. and businesses are demanding more than the economy is capable of producing. D. and businesses are demanding less than the full employment level of output.
The Fed has complete control over the money supply
Indicate whether the statement is true or false
If a nation has an absolute advantage in the production of a good,
A. it can produce that good at a lower opportunity cost than its trading partner. B. it can produce that good using fewer resources than its trading partner. C. it will specialize in the production of that good and export it. D. all of these.
The calculation of GDP does not account for the following:
a. Value of goods and services b. ?? c. ?? d. Value of the investment e. Both b and c