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The "Government Budget Constraint

Question 55

Multiple Choice
The "government budget constraint"

The "government budget constraint"


A) indicates how a budget deficit can be balanced by decreasing money growth.
B) defines the interdependency between monetary and fiscal policy.
C) states that the amount of government spending is always equal to the money supply.
D) shows that fiscal deficits are not affected by changes in monetary policy.
E) states that the national debt cannot rise beyond 15 percent of real GDP.

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