Monetizing the deficit contributes to the inflationary pressures that are already present in the economy.

Question

Quizplus · Accepted Answer

Monetizing the deficit means that the government is essentially printing more money to finance its spending, which increases the money supply in the economy. This increase in the money supply can contribute to inflationary pressures, as there is more money chasing the same amount of goods and services.

Monetizing the Deficit Contributes to the Inflationary Pressures That Are