Questions: An inflation tax is a. an explicit tax paid quarterly by businesses based on the amount of increase in the prices of their products b. a tax on people who hold interest-bearing money market mutual fund accounts c. usually employed by governments with balanced budgets d. none of the answer choices

The answer is d: none of the answer choices.

Explanation for each option:

a. An explicit tax paid quarterly by businesses based on the amount of increase in the prices of their products: This is incorrect. An inflation tax is not a direct tax paid by businesses based on price increases. Instead, it refers to the loss of purchasing power experienced by holders of money when the government prints more money, leading to inflation.

b. A tax on people who hold interest-bearing money market mutual fund accounts: This is incorrect. An inflation tax is not specifically a tax on interest-bearing accounts. It affects all holders of money, as inflation erodes the value of money.

c. Usually employed by governments with balanced budgets: This is incorrect. Inflation tax is often used by governments that are running budget deficits and choose to finance their spending by printing more money, rather than by raising taxes or borrowing.

d. None of the answer choices: This is correct. An inflation tax is not explicitly described by any of the given options. It refers to the implicit cost borne by holders of money when inflation reduces the purchasing power of their money.