Question
A country with a high level of public debt is facing
pressure from international investors to reduce its debt burden. The government is considering various options to manage its debt and improve its fiscal sustainability. Which of the following is NOT a sustainable way for the government to reduce its public debt in the long run?Solution
Monetizing the debt by printing more money can lead to hyperinflation and further economic instability. It is not a sustainable solution for reducing public debt.
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