Question

Proponents of using the inflation tax to finance government budget deficits argue that: Multiple Choice these deficits would be far worse otherwise. inflation is ultimately beneficial in the long run. the economic slowdown produced by the inflation tax is preferable to the hyperinflation that would occur in the absence of the inflation tax. while inflation is undesirable, the breakdown of the economy that would occur in the absence of an inflation tax would be worse.

Answer 1

Answer:

while inflation is undesirable, the breakdown of the economy that would occur in the absence of an inflation tax would be worse.

Explanation:

This is because, they believe that, when the economy under inflation is taxed, the money generated would be used to cushion the effects of those inflation through adequate management and administering of policies and projects.