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,resulting in
A)increased exports.
B)a rise in price inflation.
C)increased taxes.
D)a positive trade balance.
E)an increase in the worth of currency.

Question

Quizplus · Accepted Answer

An increase in government spending financed by an increase in the money supply is known as deficit spending. This can lead to inflation because the increased demand for goods and services driven by the government's spending will increase prices. Therefore, choice B is the best answer. Choices A, C, D, and E are not related to the macroeconomic policy package of 1965-1968.