The second argument is also problematic. Financing the deficit by increasing the money supply should cause inflation only when there is not enough room for economic growth. Currently, there is no reason to expect deficits to cause inflation. However, since many financiers believe that deficits ordinarily create inflation, then admittedly they will be inclined to raise interest rates to offset mistakenly anticipated inflation. This effect, however, is due to ignorance, not to the deficit itself, and could be lessened by educating financiers on this issue.
文章概况:文章开始就说美国大量赤字导致利率上升,后面给了两个观点来说明为什么会导致利率上升.第二段开头就说其实第一个观点不对,因为第一个观点假设 nongovernment borrowing and the supply of credit将会维持稳定.第三段说第二个观点也不对,因为通过金钱供给增多导致的赤字会只有经济增长没有足够的空间时才会导致通货膨胀!
Question
Which of the following best summarizes the central idea of the passage?
(A) A decrease in nongovernment borrowing or an increase in the availability of credit can eliminate or lessen the ill effects of increased borrowing by the government.
(B) Educating financiers about the true relationship between large federal deficits and high interest rates will make financiers less prone to raise interest rates in response to deficits.
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