Under the U.S.macroeconomic policy package of 1965-1968,President Lyndon Johnson backed an increase in U.S.government spending that was financed by an increase in the money supply.This resulted in _____.

Question

Quizplus · Accepted Answer

Increasing the money supply leads to inflation, as more money is chasing the same amount of goods and services. This is a common result of expansionary macroeconomic policy, where the government increases spending and/or decreases taxation to stimulate economic growth. Options A, C, D and E are not directly related to this policy, so they are not the best choice.