Assume That the Treasury Experiences a Large Increase in the Budget

question 19

Multiple Choice

Assume that the Treasury experiences a large increase in the budget deficit and issues a large number of short-term securities (Treasury bills or T-bills) . This action will ____ the supply of T-bills in the market and place ____ pressure on the yield of T-bills.

• A)decrease; downward
• B)decrease; upward
• C)increase; upward
• D)increase; downward