The Inflation Tax Is Likely to Be High When

question 134

Multiple Choice

The inflation tax is likely to be high when:

• A) there is a budget surplus.
• B) the government relies on seignorage to finance large portions of a budget deficit.
• C) the Fed decreases the money supply.
• D) corporate and personal income tax rates are increased.

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Definitions:

Cost of Goods Sold

The total expense of producing or purchasing the goods that were sold to customers during a specific period.

Merchandise Sold

The goods that a company has sold to its customers; relates to revenue generation in businesses dealing with physical products.

Notes Payable

Notes Payable are written agreements in which one party promises to pay another party a specified sum of money, either on demand or at a fixed or determinable future time.

Current Portion

Refers to the portion of long-term debt that is due to be paid within the next year.