The federal government can finance its debt by all of these measures EXCEPT a(n)

Question

Quizplus · Accepted Answer

An increase in the federal funds rate would actually make it more expensive for the government to borrow money, so it would not be a way to finance its debt. The other choices are all viable options for financing the government's debt. An increase in the money supply can lead to inflation, but it also makes it easier for the government to borrow money at lower interest rates. Selling Treasury bonds is a common way for the government to raise funds, and it is one of the primary ways that the government finances its debt. Selling government assets can also raise funds, although this is less common and would depend on what assets the government has available to sell.

The Federal Government Can Finance Its Debt by All of These