The inflation tax is often used as a significant source of, Engineering Mathematics

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The inflation tax is often used as a significant source of

Question: The inflation tax is often used as a significant source of revenue in developing countries where the tax collection and reporting system is not well developed and tax evasion may be high.

a. Use the numbers in the accompanying table to calculate the inflation tax in the United States and India (Rp = rupees).

71_Money supply.png

b. How large is the inflation tax for the two countries when calculated as a percentage of government receipts?

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