g If severe demand-pull inflation was occurring in the economy, proper government policies would involve a government Multiple Choice budget deficit, the purchase of securities in the open market, a higher discount rate, and higher reserve requirements. budget deficit, the sale of securities in the open market, a higher discount rate, and lower reserve requirements. budget surplus, the sale of securities in the open market, a higher discount rate, and higher reserve requirements. budget surplus, the purchase of securities in the open market, a lower discount rate, and lower reserve requirements.