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Monetizing the deficit is a policy combination of financing budget deficits resulting from expansionary fiscal policy, with newly printed money. With this type of policy
"Monetizing the deficit" is a policy combination of financing budget deficits resulting from expansionary fiscal policy, with newly printed money.
With this type of policy combination, which of the following is least likely to happen?
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There will be inflation except in the extreme case of Short run aggregate supply AS
There will be no inflation
LM shifts to the right
There will be no or minimal crowdingout, as opposed to purely expansionary fiscal policy.
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