Identify the relevance of the statement.

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Chapter 13, Problem 9CQ

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Identify the relevance of the statement.

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What's wrong with this way of thinking? "When the government runs a budget deficit, it simply pays its bills by printing more money. As the newly printed money works its way through the economy, it waters down the value of paper money already in circulation. Thus, it takes more money to buy things. Budget deficits are the major cause of inflation."

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