A deficit in the federal budget when the economy is operating at full employment should cause:

Name: A deficit in the federal budget when the economy is operating at full employment should cause:
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Question

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When the economy is operating at full employment, a deficit in the federal budget typically leads to demand-pull inflation. This occurs because the government's spending exceeds its revenue, injecting additional demand into the economy without a corresponding increase in supply, pushing prices up.

A Deficit in the Federal Budget When the Economy Is