If the Deficit Is Financed by Selling Bonds to the ________,The

question 36

Multiple Choice

If the deficit is financed by selling bonds to the ________,the money supply will ________,increasing aggregate demand,and leading to a rise in the price level.

• A)public;rise
• B)public;fall
• C)central bank;rise
• D)central bank;fall

---

Definitions:

Cost of Living

The amount of money needed to sustain a certain level of living, including basic expenses such as housing, food, taxes, and healthcare.

Real Value

The value of an object or service adjusted for inflation, representing its purchasing power.

Nominal Value

The face value of a financial instrument or an item's price in terms of money, without adjustment for inflation or other factors.

Price Level

The ongoing average price for the economy's produced goods and services.