HELP ME!!! ?? Secure https www.mathxl.com. Student/Player Test aspx?testld 5214 44¢ erwin eyes The following table shows the cost of producing dollar notes of various

HELP ME!!! ??

Secure https www.mathxl.com. Student/Player Test aspx?testld 5214 44&cent erwin eyes The following table shows the cost of producing dollar notes of various denominations. As you can see in the table, it costs only 12.7 cents to produce a $100 bill. Suppose the government decided that it will print new notes to fund its fiscal deficit as well as all its ongoing expenditure. Note Cost of Production $1 and $2 5.4 cents per note 5 9.8 cents per note s notes 9.0 cents per note $20 and $50 98 cents per note $100 12.7 cents per note What would be the effects of such a policy? O A. There will be no impact, because nominal GDP will also increase to keep the velocity of money constant. O B. Deflation will become a problem in the long run, because the real value of the notes is less than the face value. O C. The government will undermine the central bank, since only the central bank is supposed to print money. O D. Printing paper money has a small direct cost and so gives the government money to spend Identify a possible problem with this policy. O A. The new money might not stimulate economic growth, undermining the government's fiscal policies. O B. Because wages and prices do not move in sync, differential inflation will create problems in the labor market. O C. Real interest rates are likely to rise, increasing the costs of bank loans to the bomower. O D. Printing too much money may lead to a high rate of inflation, reducing the amount of goods and services that the government can purchase with the newly printed notes, Click to select your