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If the government is running a fiscal deficit, it can only finance it through monetization.Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.aTruebFalse

Question

If the government is running a fiscal deficit, it can only finance it through monetization.Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.aTruebFalse

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Solution

bFalse

The government can finance a fiscal deficit not only through monetization (printing more money), but also through borrowing (either domestically or internationally), or by drawing down government foreign reserves.

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