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In 2010 the U.S. government was running a large budget deficit. Some were concerned that pressure might be put on the Federal

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Answer : the price level would rise, so the value of money would fall.

A higher budget deficit will lead to lower tax rates and at the same time there will be higher government expenditures which will result into higher Aggregate Demand and this may cause Inflation.Therefore the price level would rise, so the value of money would fall.

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