If the Government Were to Run a Budget Deficit and Wanted

question 21

Short Answer

If the government were to run a budget deficit and wanted to finance it by printing money, would it have the central bank conduct open market purchases or open market sales?

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Definitions:

Outstanding Checks

Outstanding checks refer to checks that have been written and recorded by an issuing company but not yet cashed or cleared by the bank.

Receiving Report

A document completed by the receiving staff of a company, detailing the items received, their quantities, and condition upon delivery.

Invoice

A document issued by a seller to a buyer that outlines a transaction and includes details of goods or services provided, prices, date, and payment terms.

Accounts Receivable

Funds that customers owe to a business for products or services provided but not yet compensated for.