Answer to Question #211287 in Macroeconomics for Mlu

Question

Which of the following statements regarding government spending and the financing of such spending is/are correct?

a) The difference between government spending and borrowing is called the budget deficit.

b) c)

If government finances part of its spending from borrowing from the central bank, this is called inflationary financing.

Income generated from state-owned enterprises forms part of the sources of revenue for government.

Answer 1

The correct answer is:

b) If government finances part of its spending from borrowing from the central bank, this is called inflationary financing.