Which Statement Best Describes the Effect of Printing Money to Finance

question 18

Multiple Choice

Which statement best describes the effect of printing money to finance government expenditures on the Canadian economy?

• A) It accounts for 10 percent of government revenue.
• B) It accounts for less than 1 percent of government revenue.
• C) Printing money imposes a tax on net borrowers.
• D) Printing money causes the nominal interest rate to decrease.

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Definitions:

Dividends

A portion of a company's earnings distributed to its shareholders, representing a share of the corporate profits.

Dividend Controversy

A debate or disagreement regarding the relevance, impact, or appropriateness of dividend policies on a company's value and shareholders' wealth.

Stock Price

Stock price is the cost of purchasing a share of a company's stock, representing ownership in the company and its value on the stock market.

Paying Dividends

The act of distributing a portion of a company's earnings to its shareholders as a reward for their investment.