Paying for a Government Program by Printing Money

question 38

Multiple Choice

Paying for a government program by printing money:

• A)reduces the opportunity cost of the program
• B)is exactly like imposing an income tax to pay for the program
• C)imposes an inflation tax to pay for the program
• D)all of the above

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Definitions:

Beta

A measure of the volatility or systematic risk of a security or a portfolio compared to the market as a whole.

Unsystematic Risk

The risk associated with a specific company or industry, which can be mitigated through diversification.

Systematic Risk

The risk inherent to the entire market or market segment, which cannot be eliminated through diversification.

Beta

Beta is a measure of the volatility, or systematic risk, of a security or portfolio in comparison to the market as a whole, indicating its sensitivity to market movements.