Based on the inflation rate and the amount he had at the beginning of the year, Jim will pay an inflation tax of $1,000
Inflation tax refers to the value lost out of the cash holdings that a person has as a result of inflation.
With inflation being 2%, Jim would lose 2% of his cash holdings which translates to:
= Cash holdings x Inflation rate
= 50,000 x 2%
= $1,000
In conclusion, Jim will pay an inflation tax of $1,000.
Find out more at https://brainly.com/question/13724038.
