The value of money is 145 burgers . money on the value of money is known as the inflation tax.
What does inflation mean in plain English?
The rate at which prices increase over a specific time period is known as inflation. Inflation is often measured in broad terms, such as the general rise in prices or the rise in a nation's cost of living.
2017
price of burgers is 4 and total spending is 700
quantity of burgers = spending/price = 700/4 = 175
2018Price of burger in 2018 = (1+inflation)*price 2017
= 1.2*4 = 4.8
Thus, quantiity 2018 = 700/4.8 = 145.8 = 145 burgers
The impact of the government's decision to raise revenue by printing money on the value of money is known as the inflation tax.
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