If policy makers wanted to use both monetary and fiscal policy to help reduce a

Question

If policy makers wanted to use both monetary and fiscal policy to help reduce a high rate of inflation, which of the following would be most appropriate?

a larger budget deficit, the purchase of securities in the open market by the Fed, and a higher discount rate

a government budget surplus, the sale of securities in the open market by the Fed, and a higher discount rate

a larger government budget deficit, the sale of securities in the open market by the Fed, and a lower discount rate

a government budget surplus, the purchase of securities in the open market by the Fed, and a lower discount rate

a larger budget deficit, the purchase of securities in the open market by the Fed, and a higher discount rate

a government budget surplus, the sale of securities in the open market by the Fed, and a higher discount rate

a larger government budget deficit, the sale of securities in the open market by the Fed, and a lower discount rate

a government budget surplus, the purchase of securities in the open market by the Fed, and a lower discount rate

Explanation / Answer

(C)  
a larger government budget deficit, the sale of securities in the open market by the Fed, and a lower discount rate

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