Which of the following statements is correct under an inflationary economy?
A) Generally you will pay less tax in real dollars if you have depreciable assets.
B) Debt financing is always a preferred option because you are paying back with cheaper dollars.
C) Government will collect less tax in short-run, but end up collecting more in the long-run.
D) Actual dollar analysis is always preferred whereas the effects of income taxes must be considered.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements is correct under an inflationary economy?
A) Generally you will pay less tax in real dollars if you have depreciable assets.
B) Debt financing is always a preferred option because you are paying back with cheaper dollars.
C) Government will collect less tax in short-run, but end up collecting more in the long-run.
D) Actual dollar analysis is always preferred whereas the effects of income taxes must be considered.

Which of the Following Statements Is Correct Under an Inflationary