SIE Understanding Products and Their Risks Practice Question 5

Correct Answer: D

Explanation:

D: Financing deficit spending is a way the government can stimulate the economy through borrowing to support spending in excess of receipts. Choices A and B are ways in which the Federal Reserve implements monetary policy to stimulate growth without undue inflation. Choice C is intended to prevent insiders who acquired stock before it went public from profiting from the increase in the share price until a certain amount of time has passed and is not directly related to stimulating the economy.