A signal that a hyperinflation is imminent is when government finances a growing proportion of its budget deficit through:
A) bonds sold to foreigners.
B) voluntary contributions.
C) tax collections.
D) bonds sold to domestic citizens.
E) monetisation.

Question

Quizplus · Accepted Answer

Monetisation refers to the government printing more money to finance its budget deficit, which can lead to an increase in the money supply and inflation. Therefore, when a government finances a growing proportion of its budget deficit through monetisation, it is a signal that hyperinflation is imminent.

A Signal That a Hyperinflation Is Imminent Is When Government