In the Past, Some Governments' Budget Deficits Became So Large

Multiple Choice

In the past, some governments' budget deficits became so large that they could not raise sufficient taxes to finance the spending, so they ________, which led to ________.

A) reduced the amount of currency held by the public; a smaller money supply
B) increased bank reserves; a larger reserve/deposit ratio
C) printed large quantities of paper money; hyperinflation
D) ordered the central bank to sell government bonds; an increase in the money supply