Practicing Success
In order to meet a deficit in the budget government follows certain strategies, which of the following strategies would lead to an increase in the money supply in the economy? |
Loan from IMF Deficit financing Disinvestment All of the above |
All of the above |
Loan from IMF, Deficit financing (methods used by government to finance the budget deficit) and disinvestment would increase the supply of money in the economy. Loan from IMF - would bring money INTO the economy. Deficit financing - for example: printing of new currency would also INCREASE the money flow into the economy. Disinvestment: withdrawal or reduction in the investment will also INJECT money in the economy. |