The "Government Budget Constraint

question 49

Multiple Choice

The "government budget constraint"

• A) indicates how a budget deficit can be balanced by decreasing money growth.
• B) defines the interdependency between monetary and fiscal policy.
• C) states that the amount of government spending is always equal to the money supply.
• D) shows that fiscal deficits are not affected by changes in monetary policy.
• E) states that the national debt cannot rise beyond 15 percent of real GDP.

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