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  2. What is the inflation tax, and how might it explain the creation of inflation by a central bank?

What is the inflation tax, and how might it explain the creation of inflation by a central bank?

Macroeconomic

Assignment 3 Questions: Chapter 15, 17 & 18

 

  • What is the inflation tax, and how might it explain the creation of inflation by a central bank? (2.5 Marks)
  • Suppose a resident of Canada buys some machine tools from a company in Japan. Explain why and in what directions this changes Canada net exports and Canada net capital outflow. (2.5 Marks)

 


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