macro 030805

Macro 030805 - Hyperinflation-A period of extremely high monetary inflation as the government has high spending inadequate tax revenue and limited

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Adam Petrone – ID #000490127 3/8/05 MacroEconomics Prof. Liu G. The Inflation Tax 1. The Inflation Tax - The revenue the government raises by creating money. 2. There is inflation tax because when the government prints money the price level rises and thus the value of each dollar naturally decreases. 3.
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Unformatted text preview: Hyperinflation-A period of extremely high monetary inflation as the government has high spending, inadequate tax revenue, and limited ability to borrow. They turn to the printing press to pay for its spending. The massive increases in the quantity of money lead to massive inflation....
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This note was uploaded on 04/28/2008 for the course ECO 111 taught by Professor Gupta during the Spring '05 term at SUNY Albany.

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