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The supply of money = government debt + private bank credit. So if the government runs a budget surplus or private bank credit shrinks (more old debts are paid
by jganetsk 9y ago
The supply of money = government debt + private bank credit. So if the government runs a budget surplus or private bank credit shrinks (more old debts are paid off than new debts are issued) then the supply of money shrinks. This happens in actual economies.