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

  1. (a)Repayment of public debt
  2. (b)Borrowing from the public to finance a budget deficit
  3. (c)Borrowing from the banks to finance a budget deficit
  4. (d)Creation of new money to finance a budget deficit
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Official answer(d) Creation of new money to finance a budget deficit