Question #74836
11. Which of the following statements regarding financing of government expenditure are correct?
a. The budget deficit is positively related to the interest on public debt.
b. The government can finance its deficit by buying bonds from the public.
c. Inflationary financing occurs when government borrows from the central bank.
[1] All the statements are correct.
[2] a and b
[3] a and c
[4] a
[5] c
a. The budget deficit is positively related to the interest on public debt.
b. The government can finance its deficit by buying bonds from the public.
c. Inflationary financing occurs when government borrows from the central bank.
[1] All the statements are correct.
[2] a and b
[3] a and c
[4] a
[5] c
Expert's answer
Answer:3
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