The five options available to the U.S. Treasury for financing government spending are as follows: collecting taxes, printing currency, borrowing from the Federal Reserve, borrowing from the public, and
A) expanding the money supply.
B) devaluing the dollar.
C) borrowing from the banking system.
D) raising bank reserve requirements.

Question

Quizplus · Accepted Answer

Borrowing from the banking system is essentially another form of borrowing from the public, where banks use money from depositors to buy government securities. This is a common method used by the U.S. Treasury to finance government spending, alongside collecting taxes, printing currency, borrowing directly from the Federal Reserve, and borrowing from the public by issuing government securities.

The Five Options Available to the U