If the U.S. Government runs a small budget deficit, the Treasury could cover the shortfall by:

Question

Quizplus · Accepted Answer

The U.S. Treasury can cover a budget deficit by using its cash reserves held at the Federal Reserve (choice A) or by issuing new debt instruments, not by issuing new currency directly (choice B is incorrect because the Treasury does not issue currency; that's the role of the Federal Reserve). Initiating a new nationwide lottery (choice C) is not a standard or direct method for the Treasury to cover budget shortfalls.

If the US Government Runs a Small Budget Deficit, the Treasury Could