Government's right to print money to finance deficits is referred to as:

Question

Quizplus · Accepted Answer

The government's right to print money to finance deficits is called seigniorage. This refers to the profit made by the government when it prints money and lends it out at a higher rate than the cost of printing. It is a form of revenue for the government and can be used to finance deficits. A is incorrect because open-market sales refer to the sale of government securities in the open market to reduce the amount of money in circulation. C is incorrect because fiat money implementation refers to the use of currency that has no intrinsic value but is backed by the government's decree. D is incorrect because crowding out refers to the negative impact of government borrowing on private investment.

Government's Right to Print Money to Finance Deficits Is Referred