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:

Reticular Activating

Part of the reticular formation in the brainstem that plays a crucial role in controlling arousal and consciousness.

Medulla Oblongata

The lower portion of the brainstem, responsible for regulating vital functions like heartbeat, breathing, and blood pressure.

Anticholinergic Side Effects

Side effects resulting from the blockade of acetylcholine receptors, including dry mouth, blurred vision, constipation, and urinary retention.

Imipramine

A tricyclic antidepressant medication used to treat depression and certain anxiety disorders by increasing the activity of certain chemicals in the brain.