Question

Are fiscal deficits inflationary?

Answer 1

Explanation:

They show that the inflationary effect of deficits to inflation depends on the financial depth of a country, the inflation tax bases and the credibility of monetary authorities. Fiscal deficits are inflationary in developing and high-inflation countries, but not in low-inflation and developed countries.

Answer 2

Explanation:

the SMC curve cut the AVC curve at the minimum point of the AVC curve