When Governments in Developing Countries Run Budget Deficits, Central Banks

question 99

Multiple Choice

When governments in developing countries run budget deficits, central banks in these countries typically:

• A)buy the bonds issued by the government and increase the money supply in the process.
• B)buy the bonds issued by the government and decrease the money supply in the process.
• C)sell the bonds issued by the government and increase the money supply in the process.
• D)sell the bonds issued by the government and decrease the money supply in the process.

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Definitions:

Shut Down

The process of ceasing operations or activity, either temporarily or permanently.

Average Variable Costs

The per unit cost of production that varies with the level of output, including elements like labor and raw materials.

Average Costs

Average costs represent the total costs of production divided by the total output or the cost per unit of output, often used to assess the efficiency of production processes.

Shutting-Down

The process of ceasing operations or activities, often temporarily or permanently, for businesses or projects.