Monday, April 13, 2015

Derik Graham Chapter 10 Question 6

One thing that I found very interesting about this chapter was Wheelan's discussion on the "inflation tax." I found it very interesting that a govenment could pump money into an economy to generate tax revenue. What did strick me as confusing though, is how does the government gain in this scenario? What I fail to see is how exactly does devaluing the dollar do any good for them in the long run, because ultimatly the federal reserve will have to correct the problem that the government started. I guess it would make sense is it was a plan to jumpstart consumption.

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