Which of the Following Is True

Multiple Choice

Which of the following is true?

A) Federal deficits require that the Fed purchase government securities.
B) Federal deficits will always result in an increase in money supply.
C) The Federal Reserve monetizes debt by selling securities which ultimately increases money supply.
D) An agreement between the Fed and the Treasury exists whereby the Fed is directly responsible for monetizing the debt whenever the deficit increases.
E) None of the above.