If severe demand-pull inflation was occurring in the economy, proper government policies would involve a government: 1) deficit, the purchase of securities in the open market, a higher discount rate, and higher reserve requirements. 2) deficit, the sale of securities in the open market, a higher discount rate, and lower reserve requirements. 3) surplus, the sale of securities in the open market, a higher discount rate, and higher reserve requirements. 4) surplus, the purchase of securities in the open market, a lower discount rate, and lower reserve requirements.
