- May 17, 2005
The question quotes 'could' be used not is 'being' used....bellanchez said:14 was d)
because used to borrow from RBA but all it caused was inflation as all ur doing is increasing money supply without increasing supply of G/S. so dont do it anymore
Well b and d are out of question coz they're about buying securities...
If you buy securities.. then it costs you money so it will only add to the deficit!!
To finance a deficit... then you'd have to sell securities to obtain money in return
So it comes to A or C...
For C, you can increase taxation... but i don't know about reducing government spending in order to finance what you've alreday spent...
I had a dilemma between A and C...
but I chose A in the end...