QUESTION 10 The inflation tax refers to the revenue a government creates by printing money. higher inflation which requires more frequent price changes. the idea that, other things the same, an increase in the tax rate raises the inflation rate. taxes being indexed for inflation. QUESTION 11 If the nominal interest rate is 8 percent and expected inflation is 3.5 percent, then what is the real interest rate? is 11.5 percent is 7.5 percent is 4.5 percent is 2.5 percent QUESTION 12 The supply of money increases when the value of money increases. the interest rate increases. the Fed makes open-market purchases. None of the above is correct.