Question

Has government budget caused a deflationary or inflationary sitaution

Answer 1

Explanation:

Amongst the monetary measures we include higher bank rate, open-market operations, higher reserve requirements, consumer credit control, higher margin requirements, compulsory saving etc. Fiscal measures with respect to inflation include government spending, taxes, public borrowing, saving, debt management etc.

Answer 2

Answer:

Governments and central banks generally target an annual inflation rate of 2-3% in ... As a result, deflation can cause an economy to grind to a halt - and so central ... Increasing government spending.