If a government runs a deficit it can cover the gap by
A) increasing transfer payments.
B) printing money.
C) purchasing bonds.
D) lowering the discount rate.

Question

Quizplus · Accepted Answer

When a government runs a deficit, one way to cover the gap is by printing more money. This can lead to inflation if done excessively, but it directly increases the government's funds without borrowing.

If a Government Runs a Deficit It Can Cover the Gap