Assume that taxes are constant. If the government borrows $17 billion in new funds and has a budget deficit of $35 billion, then the central bank has to:
a. reduce the money supply by $52 billion.
b. reduce the money supply by $35 billion.
c. increase the money supply by $17 billion.
d. increase the money supply by $35 billion.
e. increase the money supply by $18 billion.
e
Economics
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