A nation that cannot borrow money but creates a large budget deficit is likely to experience
A) hyperinflation.
B) disinflation.
C) deflation.
D) stagflation.

Question

Quizplus · Accepted Answer

If a nation cannot borrow money but still creates a large budget deficit, it will result in the government printing more money to cover the shortfall in spending. This increase in the money supply will eventually result in hyperinflation, as the value of the currency decreases rapidly.

A Nation That Cannot Borrow Money but Creates a Large