When the government has a deficit, it can:
A) borrow by issuing debt
B) engage in intertemporal substitution by issuing debt
C) print money, although it might not want to
D) All of these answers are correct.
E) None of these answers are correct.

Question

Quizplus · Accepted Answer

When the government has a deficit, it can borrow by issuing debt, engage in intertemporal substitution by issuing debt, or print money (although this is not always desirable). Therefore, all three options are correct, and the correct answer is D.

When the Government Has a Deficit, It Can