If the Fed buys U.S. Treasury bills and bonds to finance deficits, this means that the government is financing the deficit by
A) lowering inflation.
B) raising interest rates.
C) selling capital.
D) printing money.

Question

Quizplus · Accepted Answer

When the Fed buys U.S. Treasury bills and bonds, it increases the money supply in the economy, which can lead to inflation. This means the government is financing the deficit by printing more money rather than selling capital or raising interest rates.

If the Fed Buys U