The U
Subject:EconomicsPrice:2.88 Bought3
The U.S. government funds the federal budget deficit by:
a. selling securities such as Treasury bonds and Treasury bills.
b. selling stock in government-owned corporations.
c. selling shares in gold owned by the Federal Reserve via special drawing rights.
d. borrowing from large private banks at favorable terms and low interest rates.
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The correct answer is a. selling securities such as Treasury bonds and Treasury bills.
The budget deficit is financed by issuing Treasury bonds and Treasury bills. When these bonds and bills are issued, the private sector purchases them and gives money to the government.
