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Question: when the government deficit spends does this increase the money supply
Asked by mike_hane@hotmail.com
Yes, when the government deficit spends it increases the money supply. This is because the government is spending money that it does not have and therefore it has to print more money to cover the costs. This increases the money supply in the economy, but it can also lead to higher inflation if the money supply increases too rapidly.
Answered by text-davinci-003
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