When a nation prints money (rather than taxing directly) to finance its government spending, it results in inflation, and purchasing power of the private sector falls. This is known as: a. creeping inflation.
b. seigniorage.
c. indirect taxation.
d. benchmarking.

b. seigniorage.

Explanation:

A seigniorage can be defined as the difference between the amount it cost to produce money and its face value.

Basically, the revenue generated by the government from this difference between the production cost of money and its face value can be used to finance part of its expenditures (spending) without necessarily having to directly tax the citizens living within the country. Thus, a seigniorage can either be considered as a negative revenue for the government, when the face value of the money created is lesser than its cost of production or a positive revenue for the government, when the face value of the money created is greater than its cost of production.

Hence, when a nation prints money (rather than taxing directly) to finance its government spending, it results in inflation, and purchasing power of the private sector falls. This is known as seigniorage because the creation (production) of money has led to a loss for the government rather than a gain.

answer; by looking at total product,marginal product,and changes in both after changes in inputs