A government that finances its spending by printing money is actually financing its spending by

Question

Quizplus · Accepted Answer

When a government finances its spending by printing money, it effectively reduces the value of money held by the public. This process is akin to imposing a tax on those who hold cash because their money loses purchasing power due to inflation caused by the increase in the money supply. This is not considered borrowing from the public, other government branches, or foreign entities in the traditional sense.

A Government That Finances Its Spending by Printing Money Is