During the Revolutionary War, the American coloniescould not raise enough tax revenue to fully fund thewar effort. To make up the difference, the coloniesdecided to print more money. Printing money tocover expenditures is sometimes referred to as an“inflation tax.” Who do you think is being “taxed”when more money is printed? Why?
During the Revolutionary War, the American coloniescould not raise enough tax revenue to fully fund thewar effort. To make up the difference, the coloniesdecided to print more money. Printing money tocover expenditures is sometimes referred to as an“inflation tax.” Who do you think is being “taxed”when more money is printed? Why?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter32: Macroeconomic Policy Around The World
Section: Chapter Questions
Problem 28CTQ: Why are inflationary dangers lower in the high-income economies than in low-income and middle-income...
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During the Revolutionary War, the American colonies
could not raise enough tax revenue to fully fund the
war effort. To make up the difference, the colonies
decided to print more money. Printing money to
cover expenditures is sometimes referred to as an
“inflation tax.” Who do you think is being “taxed”
when more money is printed? Why?
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