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One Way of Financing a Budget Deficit Is for That

Question 40

Multiple Choice

One way of financing a budget deficit is for that nation's central bank to monetize the debt. In the United States,


A) the Federal Reserve Bank has monetized only a small portion of the national debt.
B) the Federal Reserve Bank has monetized a very large portion of the national debt.
C) the Federal Reserve is prohibited form monetizing the national debt because of its independent agency status.
D) the Federal Reserve Bank has monetized approximately half of the national debt.
E) the Federal Reserve Bank does not participate in government treasury obligations.

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