Which one of the following is likely to be the most inflationary in its effect?

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CollectorBabu · Accepted Answer

Correct Answer: Creating new money to finance a budget deficit. Creating new money to finance a budget deficit will be the most inflationary effect because it increases money supply without any increase in production of goods and services. This method of currency expansion was adopted by Germany post-WWI, which hampered its currency to an unprecedented scale.

Which one of the following is likely to be the most inflationary in its effect?

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