The Argument That Budget Deficits Are Inflationary Is

question 147

Multiple Choice

The argument that budget deficits are inflationary is

• A)always correct.
• B)correct only when the deficit is monetized.
• C)correct only when the aggregate supply curve is horizontal.
• D)correct only when the aggregate supply curve is upward sloping.

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Definitions:

Capital Market

A financial market in which long-term debt or equity-backed securities are bought and sold, assisting in raising capital.

Financial Resources

Monetary assets available to a company or individual for use in the production of further assets or to cover expenses.

Firms

Businesses or companies engaged in commercial, industrial, or professional activities, aiming to generate profits.

Tangible Capital

Physical assets owned by a person or company that are used in the production or supply of goods and services.