The government can borrow or create new money to cover the difference if expenditures are greater than revenues, causing a budget deficit. A deficit financed by creating new money is most apt to cause inflation, while borrowing or tax increases would be less inflationary options.

1. Macroeconomics help!?
If government expenditures are greater than government revenues, the government
can _________ to cover the difference: a. declare bankruptcy b. borrow or c
reate new money c. reduce taxes d. reduce the national debt A government
budget deficit is most apt to cause inflation if it is financed by: a. increa
sing personal and corporate taxes b. creating new money c. borrowing from co
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