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Government Deficit Financing Is Made Easier by a P-Percentage-Point Rise

Question 37

Multiple Choice

Government deficit financing is made easier by a p-percentage-point rise in inflation if it raises the nominal interest rate by ________ than p percentage points,and the private sector wishes to hold ________ quantity of real government bonds.


A) less,a lower
B) less,the same
C) more,a lower
D) more,the same

Correct Answer:

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