It may be necessary to cut the deficit as part of a credible anti-inflationary policy because the public knows that large deficits
A)are inflationary by themselves in the long run.
B)create inefficiencies.
C)put pressure on the Fed to expand the money supply to keep interest rates from rising.
D)put pressure on the Fed to contract the money supply to prevent employment from rising.

Question

Quizplus · Accepted Answer

Large deficits put pressure on the Fed to expand the money supply to keep interest rates from rising.

It May Be Necessary to Cut the Deficit as Part