SOLVED

11) When federal government expenditures exceed tax receipts, the Treasury must A) expand the money supply. B) raise taxes. C) reduce spending. D) sell bonds. 12) The five options available to the U.S. Treasury for financing government spending are as follows: collecting taxes, printing currency, borrowing from the Federal Reserve, borrowing from the public, and A) expanding the money supply. B) devaluing the dollar. C) borrowing from the banking system. D) raising bank reserve requirements. 13) Immediately after being collected, taxes are deposited in A) tax and loan accounts. B) the Federal Reserve Bank of New York. C) Federal Reserve district banks around the country. D) the Congressional Vault. 14) If the government collects taxes to pay for expenditures of an equal amount, bank reserves A) are unaffected. B) rise by an equal amount. C) rise by a multiple amount. D) fall by an equal amount. 15) If the government collects taxes and makes expenditures of a smaller amount, bank reserves A) are unaffected. B) may rise or fall. C) rise. D) fall. 16) U.S. Treasury deposits at the Fed are A) part of M1, M2, and M3. B) part of M1 and M2. C) part of M1. D) not part of the money supply. 17) When taxes paid by a check are deposited in tax and loan accounts, A) bank reserves and the money supply are unaffected. B) bank reserves fall but the money supply is unaffected. C) bank reserves are unaffected but the money supply falls. D) bank reserves and the money supply fall. 18) If the federal government collects $10 billion in taxes and then spends it on the public, the money supply A) rises by $20 billion. B) rises by $10 billion. C) falls by $10 billion. D) is unaffected. 19) Assume the federal government collects $20 billion in taxes and spends them on the public. If the money multiplier is 2.5, bank reserves A) and the money supply still increase by only $20 billion. B) increase by $20 billion and the money supply increase by $50 billion. C) and the money supply both increase by $50 billion. D) and the money supply are unaffected. 20) Repos and reverse repos are A) permanent injections or deletions of reserves. B) always dynamic policy tools. C) temporary injections or deletions of reserves. D) sometimes defense, but most often dynamic policy tools.