Inflation acts as a tax because the government gains purchasing ...

[captainjonesify]

Inflation acts as a tax because the government gains purchasing power. Is the previous statement correct or incorrect?
 
  What will be an ideal response?

Question 2

One type of demander in the loanable funds market
 
  A) lends funds to purchase financial capital.
  B) lends funds to purchase physical capital.
  C) wants physical capital in order to purchase financial capital.
  D) wants funds to purchase financial capital.
  E) wants funds to purchase physical capital.

[shaquita]

Answer to Question 1

The statement is correct. Inflation decreases the purchasing power of people's money and the government essentially gains the purchasing power.

Answer to Question 2

E

[captainjonesify]

Excellent

[xiaomengxian]

Thanks for the timely response, appreciate it