A Deficit Resulting from the Use of Discretionary Fiscal Policy

question 101

Multiple Choice

A deficit resulting from the use of discretionary fiscal policy

• A)increases interest rates
• B)decreases interest rates
• C)increases interest rates if the effect of the decrease in the demand for money is greater than the effect of the increase in the supply of government securities
• D)increases interest rates if the effect of the decrease in the demand for money is less than the effect of the increase in the supply of government securities
• E)increases interest rates if the effect of the increase in the demand for money is greater than the effect of the decrease in the supply of government securities