If a government were to find that it cannot raise taxes any further, and that it cannot borrow any further from financial markets, the government:

Question

Quizplus · Accepted Answer

When a government cannot raise taxes or borrow from financial markets, it can still increase spending by having the central bank purchase its bonds. This is a form of monetary financing where the central bank creates money to buy government bonds, effectively funding government expenditures.

If a Government Were to Find That It Cannot Raise