Solved: An inflation tax is a. imposed by governments to offset price increases. b. paid

Chapter 0, Problem 4

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QUESTION:

An inflation tax is a. imposed by governments to offset price increases. b. paid directly as a percentage of the sale price on purchases. c. the result of a decrease in the value of money held by the public. d. generally levied by states rather than the federal government. e. higher during periods of low inflation.

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QUESTION:

An inflation tax is a. imposed by governments to offset price increases. b. paid directly as a percentage of the sale price on purchases. c. the result of a decrease in the value of money held by the public. d. generally levied by states rather than the federal government. e. higher during periods of low inflation.

ANSWER:

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Inflation acts as distortion or a ray of positivity in purchasing capacities of an individual. Individuals face the primary impact on their disposable incomes on account of changing inflation.

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