A government prints money to finance its expenditures.As a result,

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Quizplus · Accepted Answer

Printing money can lead to inflation because as the money supply increases, the value of each individual unit of currency decreases. Inflation can also lead to consumers giving up private goods to finance the increased government expenditures as the cost of goods and services increases. Therefore, both option (b) and (c) are correct. Option (a) is not necessarily true since the economy operating outside its production possibility curve depends on other factors such as technological advancement and trade.

A Government Prints Money to Finance Its Expenditures