Shortcut Navigation:

Aggregate Demand Curve Quiz

The finance of government spending through a Treasury sale of bonds which are then purchased by the Fed

This method of financing government spending is frequently called printing money because high-powered money (the monetary base) is created in the process.

Only when budget deficits are financed by money creation does the increased government spending lead to a(n) _____ in the _____.

A government budget deficit can only lead to an expansion of the monetary base if

If the deficit is financed by selling bonds to the _____, the money supply will _____, shifting the aggregate demand curve to the right, and leading to a rise in the price level.

If the deficit is financed by selling bonds to the _____, the money supply will _____, shifting the aggregate demand curve to the _____.

If the deficit is financed by selling bonds to

Persistent budget deficits will be inflationary if

Financing a deficit by money creation will lead to a sustained inflation if the deficit

For budget deficits to be inflationary, they must be

Tagged as: aggregate demand curve, aggregate demand curve, budget deficit, aggregate demand curve, aggregate demand curve, budget deficit, deficit
Home | About | Create | Register | Privacy | Terms | Sitemap | [Facebook] [Twitter] [Google+]