If a Deficit Is Financed by Issuing New Money, The

question 175

Multiple Choice

If a deficit is financed by issuing new money, the:

• A)government is using its accumulated surplus to issue the new money.
• B)government will be competing with private borrowers for funds.
• C)increased demand for funds will drive up the interest rate.
• D)crowding-out of investment can probably be avoided.

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Definitions:

Assignee's Consent

The agreement or approval given by the party to whom rights or property have been transferred or assigned.

Materially Vary

To change in a significant and substantial way, which can affect the outcome or nature of a contract or agreement.

Personal Skill

The ability or expertise that an individual has acquired through training or experience.

Insurance Policy

A contract between an individual or entity and an insurance company, outlining the terms for the payment of claims in the event of loss.