The Central Bank Is Said to Monetize the Deficit When

question 57

Multiple Choice

The central bank is said to monetize the deficit when it

• A)prints Federal Reserve notes to satisfy the increased demand for money.
• B)sells government bonds from its own portfolio of government securities.
• C)requires member banks to buy the bonds to finance the deficit.
• D)purchases the bonds that the government issues.

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Definitions:

Initiative Over Guilt

A concept from Erik Erikson's stages of psychosocial development, referring to the phase where children assert themselves more frequently through directing play and other social interactions, overcoming feelings of guilt for their actions and initiatives.

Learned Helplessness Orientation

A condition in which a person suffers from a sense of powerlessness, arising from a traumatic event or persistent failure to succeed, which is generalized to other situations.

Fixed Mindset

A belief that one's abilities, intelligence, and talents are fixed traits, leading to a tendency to avoid challenges and give up easily when faced with obstacles.

Authoritative

A parenting style characterized by high expectations, understanding, and support toward the child.