Increased government borrowing to cover a budget deficit results in:
a. a higher interest rate and the depreciation of the U.S. dollar.
b. a higher interest rate and the appreciation of the U.S. dollar.
c. a lower interest rate and the depreciation of the U.S. dollar.
d. a lower interest rate and the appreciation of the U.S. dollar.
e. increased purchases of foreign assets by U.S. residents.
Question 2
One of the most widely reported measures of inflation is the:
a. consumer price index.
b. producer price index.
c. GDP deflator.
d. Gini coefficient.
e. real interest rate.
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