Imagine you live in a country with huge public debt and an uncertain future. Monetization of this public debt is most likely to lead to which of these outcomes?

Question

Imagine you live in a country with huge public debt and an uncertain future. Monetization of this public debt is most likely to lead to which of these outcomes?

Quizplus · Accepted Answer

Monetization of public debt typically involves the central bank buying government bonds, which increases the money supply. This can lead to inflation as more money chases the same amount of goods and services.

Imagine You Live in a Country with Huge Public Debt