This method of financing government spending is frequently called printing money because high-powered money (the monetary base)is created in the process.
A)financing government spending with taxes
B)financing government spending through a Treasury sale of bonds that are then purchased by the Fed
C)financing government spending by selling bonds to the public,which pays for the bonds with currency
D)financing government spending by selling bonds to the public,which pays for the bonds with checks

Question

Quizplus · Accepted Answer

Financing government spending through a Treasury sale of bonds that are then purchased by the Fed is commonly referred to as printing money because it involves creating high-powered money (the monetary base) through the purchase of government debt by the central bank.

This Method of Financing Government Spending Is Frequently Called Printing