Multiple Choice
Suppose the Treasury sells $10 billion of newly issued Treasury bills to the Fed and uses the proceeds to increase government spending by $10 billion.How will this affect the money supply and the national debt?
A) The money supply will increase;the national debt will decline.
B) The money supply will decline;the national debt will increase.
C) The money supply will be unaffected;the national debt will increase.
D) Both the money supply and the national debt will increase.
Correct Answer:
Verified
Correct Answer:
Verified
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