Treasury borrowing directly from Federal Reserve:

Question

Quizplus · Accepted Answer

When the Treasury borrows directly from the Federal Reserve, it increases the money supply because the Federal Reserve essentially creates money to lend to the Treasury. This increase in the money supply can lead to increased total spending as the government spends the borrowed money. Additionally, the increase in the money supply can lead to lower interest rates, as the added money increases deposits in banks, which can then lend more easily.

Treasury Borrowing Directly from Federal Reserve