The practice of "monetizing the debt" is traditionally feared because it is thought to cause
A)unemployment.
B)inflation.
C)a falling price level.
D)a liquidity trap.

Question

Quizplus · Accepted Answer

Monetizing the debt refers to the practice of a country's central bank printing new money to purchase government debt. This increases the money supply in the economy and can lead to inflation as the value of the currency may decrease.

The Practice of "Monetizing the Debt" Is Traditionally Feared Because