GyanGramQuestion
Which one of the following is likely to be the most inflationary in its effects?
PRELIMS 2021 · INDIAN ECONOMY
Which one of the following is likely to be the most inflationary in its effects?
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• Correct Answer: D
• Deficit financing (printing money) directly expands money supply without output growth, causing hyperinflation per monetarist theory.
• Public borrowing merely transfers existing money; bank borrowing creates limited credit compared to money creation.
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