What is the inflation tax, and how might it explain the creation of inflation by a central bank?

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The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
Due date for Assignment 1 is by the End of Week 11 (12/11/2022)
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.
Assignment 2 Questions: Chapter 15, 17 & 18
(10 Marks)

1.A country has 150,000 people. Of these 25,000 are children under the age of 16. 92000 people have jobs and 8000 don’t have job and are looking for work and 25,000 people are retired.
a.Calculate the labour force participation rate (2.5 Marks)
b.Calculate the unemployment rate (2.5 Marks)
2.What is the inflation tax, and how might it explain the creation of inflation by a central bank? (2.5 Marks)
3.Suppose a resident of Canada buys some machine tools from a company in Japan. Explain why and in what directions this changes Canada net exports and Canada net capital outflow. (2.5 Marks)

Answer:

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