If a Country with a Large Government Debt Uses Money

Question 58
Multiple Choice

If a country with a large government debt uses money creation to service and repay the debt,this will lead to A)lower interest rates. B)an appreciation of the nation's currency in the foreign exchange market. C)inflation,higher interest rates,and a financial crisis. D)rapid economic growth,as the expansionary monetary policy stimulates the economy and generates the additional tax revenue to service the larger debt.