How Long Will It Take for the Purchasing Power of $1

question 139

Multiple Choice

How long will it take for the purchasing power of $1 to be cut in half if inflation is 4 percent?

• A) 4.97 years
• B) 7.42 years
• C) 10.72 years
• D) 17.67 years

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Definitions:

Income

The financial gain received by an individual or entity, typically through wages, profits, rents, or investments.

Government Revenues

The total money received by the government from various sources, including taxes, fees, and other charges.

Lump-Sum Tax

A tax that is a fixed amount, not dependent on the taxpayer's income level or economic transactions.

Deadweight Loss

A loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is achievable but is not achieved.