Proponents of Using the Inflation Tax to Finance Government Budget

Multiple Choice

Proponents of using the inflation tax to finance government budget deficits argue that:

A) these deficits would be far worse otherwise.
B) inflation is ultimately beneficial in the long run.
C) while inflation is undesirable, the breakdown of the economy that would occur in the absence of an inflation tax would be worse.
D) the economic slowdown produced by the inflation tax is preferable to the hyperinflation that would occur in the absence of the inflation tax.