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.

---

Definitions:

Muscle

A tissue in animals composed of fibers capable of contracting to effect bodily movement.

Hyaline Cartilage

A type of connective tissue found in various parts of the body such as the nose, trachea, and larynx, characterized by a translucent appearance and providing support with flexibility.

Fibrocartilage

A type of tough, very dense, and fibrous cartilage found in places requiring great tensile strength such as intervertebral discs and the menisci.

Elastic Cartilage

A type of flexible cartilage that contains elastic fibers, enabling structures like the ear and epiglottis to bend and return to their original shape.