During 2011, the inflation rate in the United Kingdom was about 3.6 percent
During 2011, the inflation rate in the United Kingdom was about 3.6 percent. During that year, the national debt of the United Kingdom was about £ 940 billion. Discuss the implications of these facts for measuring government revenues in that country during 2011.Answer: The inflation erodes the real value of the debt by 0.036 x £904 billion or £32.54 billion.The fact that inflation reduces the real debt obligation means that this figure should be included as revenue to the government.
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