The inflation tax falls mostly heavily on
A)those who hold a lot of currency and accounts for a large share of U.S.government revenue.
B)those who hold a lot of currency but accounts for a small share of U.S.government revenue.
C)those who hold little currency and accounts for a large share of U.S.government revenue.
D)those who hold little currency but accounts for a small share of U.S.government revenue.

Question

Quizplus · Accepted Answer

The inflation tax falls mostly heavily on those who hold a lot of currency but accounts for a small share of U.S. government revenue. This is because inflation erodes the value of money over time, effectively reducing the purchasing power of those holding currency. However, the government uses other methods like borrowing and taxation to finance its expenditures, making the inflation tax a relatively small contributor to government revenue.

The Inflation Tax Falls Mostly Heavily on