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Economics - Financial Markets
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Can FISCAL POLICY really work without MONETARY POLICY, i.e. without monetizing the debt?
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I understand perfectly what fiscal policy entails. However, it just hit me that if the government runs into a deficit but does not print money to cover it, then this policy would be drawing out resources from financial markets (which would have otherwise been lent, most probably as the loan of a bank). Am I thinking on correct lines? Thanks in advance.
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