A developing country does not have enough taxes to cover its expenditures and is unable to borrow. This government would be most likely to cover its deficit by
A) purchasing government bonds from the public.
B) selling government bonds to the public.
C) selling newly issued government bonds directly to the central bank.
D) buying newly issued government bonds directly from the central bank.
C
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According to this Application, a common belief is that fiscal multipliers are ________ during ________
A) larger; recessions B) of equal size; recessions and growth periods C) smaller; growth periods D) smaller; recessions
Suppose that the federal government provides wheat farmers with a price floor above the market equilibrium price of wheat, creating a surplus. Which of the following causes a reduction in the surplus of wheat?
a. An increase in the supply of wheat. b. An increase in the price of wheat. c. A decrease in the demand for wheat. d. Elimination of the price floor.