GyanGram
ATTEMPT · INDIAN ECONOMY · PRELIMS 2013
Which one of the following is likely to be the most inflationary in its effect?
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Which one of the following is likely to be the most inflationary in its effect?
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• Correct Answer: D
• Creating new money (deficit monetization) is the most inflationary as it expands the monetary base without matching output.
• Public borrowing reallocates existing money; bank borrowing is constrained by reserves.
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