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Q43. Monetizing the debt causes a. the money supply to contract b. the money sup

ID: 1213204 • Letter: Q

Question

Q43. Monetizing the debt causes
   a. the money supply to contract
   b. the money supply to rise
   c. tax revenues to contract
   d. tax revenues to rise

Q44. The federal government's ability to repay the national debt is limited only by the
   a. debt ceiling
   b. incidence of taxes
   c. total assets of the economy
   d. political clout of the Fed's Board of Governors

Q45. Paying off the national debt would redistribute income from the
   a. debt holders to the taxpayers
   b. taxpayers to the major recipients of transfer payments
   c. banks to the taxpayers
   d. taxpayers to the debt holders

Q46. The rate at which two currencies are exchanged for each other is the
   a. exchange rate
   b. tariff rate
   c. reserve rate
   d. managed rate

Explanation / Answer

43. Monetizing the debt causes money supply to increase as more currency notes are printed.

44.  The federal government's ability to repay the national debt is limited only by the assets of the economy.

45. Paying off the national debt would redistribute income from the tax payers to debt holders as the tax payer's income is used to pay the debt.

46. The rate at which two currencies are exchanged for each other is the exchange rate.