February 20, 2017

Homework Help: Economics

Posted by Conor on Thursday, April 12, 2012 at 1:43pm.

An increasein governemtn expenditure in increasing GDP when it is financed by:
a) rasing taxes
b) slling governemtn bonds to the general public
c) selling governemtn bonds to the central bank
d) selling government bonds to the commercial banks
e) both c and d

The right answer is c but I don't know why. Could someone please explain it? Thanks!!

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