The inflation tax is often used as a significant source of revenue in developing countries where the

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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 Canada and India (Rp = rupees).

Money supply in 2010 (billions) C$519 Rp16,318 Central government receipts in 2010 (billions) Inflation in 2010 C$237 Ca

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

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Macroeconomics

ISBN: 978-1319120054

3rd Canadian edition

Authors: Paul Krugman, Robin Wells, Iris Au, Jack Parkinson

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Question Posted: Dec 03, 2018 07:39 AM

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The inflation tax is often used as a significant source of revenue in developing countries where the

Question:

Money supply in 2010 (billions) C$519 Rp16,318 Central government receipts in 2010 (billions) Inflation in 2010 C$237 Canada 1.84% India Rp7,943 1.65

Step by Step Answer:

a The inflation tax is equal to Inflation rate Money suppl...View the full answer

Macroeconomics

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