RRaahUPSC
2021 · EconomyPrevious Year Question
Q10.
Which one of the following is likely to be the most inflationary in its effects?
A. Repayment of public debt
B. Borrowing from the public to finance a budge deficit
C. Borrowing from the banks to finance a budget deficit
D. Creation of new money to finance a budget deficit
Answer

D

Explanation

Borrowing from public and banks will lead to a decrease in the money supply in market as in both the options money in hand is reduced for public and money to lend is reduced for banks. Creation to new money to finance
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