The issuing of government securities to the general public is considered _____ to the government.
A) an asset
B) a liability
C) inflationary
D) as money financing

Question

Quizplus · Accepted Answer

The issuing of government securities creates a legal obligation for the government to repay the amount to the investors with an additional interest. Hence, it is considered a liability for the government. A is incorrect as government securities do not represent ownership in any asset. C is incorrect as the issuing of government securities may affect the money supply and interest rates, but it is not directly inflationary. D is incorrect as government securities are not used as a means of financing the money supply.

The Issuing of Government Securities to the General Public Is