A-LevelEconomicsMoney and BankingMay/June 2017Paper 3 Q211 Mark
An increase in government expenditure is financed by borrowing from the central bank. Other things being equal, what will be the effect on the money supply? A It will decrease. B It will increase by an amount equal to the increase in government expenditure. C It will increase by more than the increase in government expenditure. D It will remain unchanged.
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