Question

Proponents of using the inflation tax to finance government budget deficits argue that: Multiple Choice these deficits would be far worse otherwise. inflation is ultimately beneficial in the long run. the economic slowdown produced by the inflation tax is preferable to the hyperinflation that would occur in the absence of the inflation tax. while inflation is undesirable, the breakdown of the economy that would occur in the absence of an inflation tax would be worse.

Answer 1

Answer: while inflation is undesirable, the breakdown of the economy that would occur in the absence of an inflation tax would be worse.

Step-by-step explanation:

Budget deficit is a situation whereby the expenditure of the government for a certain year is more than the revenue the government makes.

Proponents of using the inflation tax to finance government budget deficits argue that while inflation is undesirable, the breakdown of the economy that would occur in the absence of an inflation tax would be worse.