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.

---

Definitions:

Studying Economics

The academic examination of how societies use resources to produce goods and provide services, including the analysis of production, consumption, and distribution.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen, essentially what is forfeited when a particular course of action is selected over others.

Attending College

The act of enrolling in and going to a collegiate institution for higher education, often pursued to gain skills, knowledge, and qualifications for future employment.

Annual College Expenses

The total cost of attending a college or university for one academic year, including tuition, fees, room, board, books, and other related expenses.