When the federal government incurs a budget deficit, it will
A) mint more coins and spend them.
B) create money out of thin air.
C) impose a special tax on all income earners.
D) borrow money from the Federal Reserve System by issuing securities.
E) borrow money from the public by issuing government securities.
E
You might also like to view...
If in a perfectly competitive industry, the market price facing a firm is below its average total cost but above average variable cost at the output where marginal cost equals marginal revenue
A) the industry supply will not change. B) firms are breaking even. C) some existing firms will exit the industry. D) new firms are attracted to the industry.
The increase of the real money supply by 10% by the Federal Reserve when the unemployment rate rises by 1% is an example of
A) the conduct of procyclical monetary policy. B) the utilization of feedback policy rule. C) the utilization of rigid policy rule. D) the conduct of nondiscretionary fiscal policy.