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    Question

    During periods of inflation, tax rates should 

    A increase Correct Answer Incorrect Answer
    B decrease Correct Answer Incorrect Answer
    C remain constant Correct Answer Incorrect Answer
    D fluctuate Correct Answer Incorrect Answer

    Solution

    During periods of inflation, increasing the tax rate can help regulate consumer spending and mitigate the impact of rising prices. By adjusting the tax rate upward, disposable income available to consumers is reduced, which can help curb excessive spending and potentially alleviate inflationary pressures.

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