Author Question: Suppose the government has a 900 billion budget deficit. If the government borrows 560 billion to ... (Read 60 times)

moongchi · **on:** Jun 30, 2018

Suppose the government has a 900 billion budget deficit. If the government borrows 560 billion to finance this deficit and finances the rest by printing money, the amount of new money created will be

A) 340 billion. B) 560 billion. C) 900 billion. D) 1,460 billion.

Question 2

Refer to the scenario above. Earthland's current account would show a balance of ________.

A) -10 billion B) 10 billion C) -4 billion D) 14 billion