Which of the following is likely to be the most inflationary in its effects?
Question:
Which of the following is likely to be the most inflationary in its effects?
Which of the following is likely to be the most inflationary in its effects?
Options
Answer: Creation of new money to finance a budget deficit
Explanation:
Printing new money increases the money supply without a corresponding increase in goods and services, leading to demand-pull inflation — the most inflationary option.
Explanation:
Printing new money increases the money supply without a corresponding increase in goods and services, leading to demand-pull inflation — the most inflationary option.
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