Part 1When the federal government sells a Treasury bond in the primary marketlong dash—via Treasury auction, it is:Part 2
A. directly putting downward pressure on interest rates. B. increasing the money supply. C. seeking a safe investment vehicle for the Social Security Trust Fund. D. seeking to finance government spending as an alternative to raising taxes.

Question

Part 1When the federal government sells a Treasury bond in the primary marketlong dash—via Treasury​ auction, it​ is:Part 2
A. directly putting downward pressure on interest rates. B. increasing the money supply. C. seeking a safe investment vehicle for the Social Security Trust Fund. D. seeking to finance government spending as an alternative to raising taxes.

BlackTom AI · Accepted Answer

The question asks about the purpose of the federal government selling a Treasury bond in the primary market via Treasury auctions.
Option A: 'directly putting downward pressure on interest rates.' In reality, auctions themselves do not set policy to push rates downward; rather, the interest rate (yield) results from market demand at the auction. It’s not accurate to say the act of issuing bonds directly determines downward pressure on rates in a prescriptive sense.
Option B: 'increasing the money supply.' Selling bonds in the primary market is a mechanism that can absorb reserves from the banking system, not increase the money supply. When the government sells bonds, investors pay for them with money that is removed from circulation, which can reduce, not expand, the money supply.
Option C: 'seeking a safe investment vehicle for the Social Security Trust Fund.' While Treasury securities are considered safe, the primary purpose of issuing bonds is not specifically to provide a vehicle for the Social Security Trust Fund. That fund’s holdings are a separate objective within the broader fiscal framework and asset allocation, not the fundamental reason for a primary market auction.
Option D: 'seeking to finance government spending as an alternative to raising taxes.' This aligns with the typical explanation: Treasury auctions finance government operations and deficits, providing funds to cover expenditures when tax revenue and prior surpluses are insufficient. It represents the standard role of issuing government debt to fund spending rather than immediately increasing taxes.
In summary, each incorrect option misstates the mechanism or purpose of primary-market Treasury auctions: A confuses market outcomes with policy intentions, B misinterprets the effect on the money supply, C overemphasizes a specific use by a trust fund rather than the general financing purpose, and D correctly identifies the core objective of financing government spending as an alternative to tax hikes.

类似问题

The government runs a budget deficit this year. How is the deficit typically financed?

Name the Supreme Court decision that removed financial constraints on PACs.

Political scientists Joshua Kalla and David Broockman find that senior policy makers made themselves available to _____ between three and four times more often than they did to constituents.

Name the political scientist who argues that parties are designed to serve the needs of ambitious politicians (namely candidates and officeholders).

Name the political scientist who said this famous quote about the problems of pluralism: “The flaw in the pluralist heaven is that the heavenly choir sings with a strong upper-class accent.”

What is the name of the third party candidate in 2000 who was not allowed to participate in the presidential debates? Hint: We watched a video clip with him in class.

E.E. Schattshneider said, "Democracy is ________ save in terms of the parties."

Who was the most recently appointed justice to the Supreme Court?

更多留学生实用工具

智能学习助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单