What is the inflation tax, and how might it explain the creation of inflation by a central bank?
The inflation tax refers to the fact that inflation is a tax on money. When prices rise, the value of money currently held is reduced. Hence, when a government raises revenue by printing money, it obtains resources from households by taxing their money holdings through inflation rather than by sending them a tax bill. In countries where governments are unable or unwilling to raise revenues by raising taxes explicitly, the inflation tax may be an alternative source of revenue.
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What is the main reason for health insurance companies to require deductibles and coinsurance?
a. To deal with the adverse selection problem b. To deal with the moral hazard problem c. To subsidize doctors and hospitals
In the short run, if average product is at its maximum, then average variable cost is at its minimum
Indicate whether the statement is true or false
If the MRP per dollar is greater for labor than that for tools, a producer should spend more money on labor than originally planned and less on tools. How long can he continue this switch in spending? Why?
What will be an ideal response?
State governments in the United States can raise revenue by all the following means except
A) increasing income taxes. B) increasing taxes on corporate profits. C) increasing sales taxes. D) increasing the money supply.