Suppose the government has a $440 billion budget deficit. If the government borrows $330 billion to finance this deficit and finances the rest by printing money, the amount of new money created will be

Question

Quizplus · Accepted Answer

If the government borrows $330 billion, then the remaining amount that needs to be financed by printing money is:
$440 billion - $330 billion = $110 billion

Therefore, the amount of new money created is $110 billion, which corresponds to choice B.

Suppose the Government Has a $440 Billion Budget Deficit