Inflation is a tax on money holdings
1. because people have to give real
goods to the government to maintain their desired level of real
money holdings in the face of ongoing inflation.
2. because, to make a given real
expenditure, the government has to take the same amount of resources
from the private sector whether it does it by conventional taxation or by
printing money.
3. for both of the above reasons.
4. for neither of the above reasons.
Choose the correct option.