Question

True / False

1- The tax bill of 1935 was referred to as the “soak the middle class” tax increase.

2- “Regime uncertainty” was the concept used to explain the slow reductions in unemployment that occurred during the latter 1930s.

3- According to Polleit, the advice given by Mises helped to stop the hyperinflation that was ongoing in Austria in 1922.

4- Among the hyperinflations cited in the article were China in 1949-1950, Russia in 1992, and Italy in 2003.

5- The potential for hyperinflation is increased if a country has a larger and larger amount of debt outstanding.

Answer 1

1) False

( The tax bill of 1935 was referred to as " soak the rich tax ".)

2) False

( Regime uncertainty was the concept used to explain the pervasive lack of confidence among investors to foresee the extent to which government actions will change their private property rights.)

3) True

( Mises realized how money demand plays a crucial role in unfolding hyper inflation. He opined that process of rising prices would stop once people have fully adjusted for the expected increase in the money supply. His policy advice was instrumental in controlling the hyper inflation which Wrecked havoc in the Austrian economy in 1922)

4) False.

( only Hyper inflation in China in 1949-50 and hyper inflation in Russia in Russia comes among important hyper inflations on 20th century. Inflation in ltaly in 2003 was not considered by Palleit.)

5) True

(Today's fiat money regimes are characterized by greater amount of debt relative to real income . Higher debt burden is caused by policies that try to solve economic problems created by credit and money with more amount of credit and money. So, higher the overall debt levels of an economy, higher the possibility of hyper inflation.)