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The Government of a DVC May Force the Economy to Save

Question 106

Multiple Choice

The government of a DVC may force the economy to save by deliberately causing inflation. This policy is undesirable because inflation may


A) distort investment away from productive facilities and toward luxury housing and precious metals.
B) increase voluntary saving because the value of money is depreciating.
C) contribute to a balance of trade surplus.
D) entail all of these problems.

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