To maintain a given equilibrium, which of the following would not offset an increase in the fiscal deficit?

Name: To maintain a given equilibrium, which of the following would not offset an increase in the fiscal deficit?
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Question

Quizplus · Accepted Answer

An increase in consumption would not offset an increase in the fiscal deficit because it would likely lead to a further increase in the deficit by increasing demand and potentially worsening the balance of payments if it leads to increased imports.

To Maintain a Given Equilibrium, Which of the Following Would