In the Long Run, the Government Budget Will Add to Sustained

question 54

Multiple Choice

In the long run, the government budget will add to sustained inflation if

• A)deficits are always accompanied by decreases in the money supply.
• B)they require decreases in the money supply.
• C)continual deficits are financed by the continual creation of new money.
• D)government borrowing lowers interest rates.
• E)the government finances the deficit by borrowing from the private sector.

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