Suppose that all wages and prices in an economy are indexed to inflation that is, wages

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Suppose that all wages and prices in an economy are indexed to inflation — that is, wages and prices are automatically adjusted to incorporate the latest inflation figures. Can there still be an inflation tax?

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Macroeconomics

ISBN: 9781319245269

6th Edition

Authors: Paul Krugman, Robin Wells

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Question Posted: Feb 16, 2024 04:00 AM

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Suppose that all wages and prices in an economy are indexed to inflation that is, wages

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Yes even in an economy where wages and prices are indexed to inflation there can still be an inflation tax An inflation tax refers to the revenue that ...View the full answer

Macroeconomics

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