Progressives argue that deficit spending will cause inflation only if:

Question

Quizplus · Accepted Answer

Progressives argue that deficit spending will cause inflation only if the economy is operating at a level of full employment, as any additional government spending will create excess demand for goods and services, driving up prices. In a recession, there is often excess capacity and unemployment, so deficit spending may stimulate the economy without leading to significant inflation. The option C is not accurate as deficit spending can lead to inflation in certain circumstances.

Progressives Argue That Deficit Spending Will Cause Inflation Only If