Question

What was the relationship between inflation and the Argentina government's acute budget deficit?

A) Inflation caused the government deficit.
B) The deficit caused inflation.
C) Inflation and the deficit were unrelated.
D) The deficit helped control inflation.

Answer 1

The deficit caused inflation in the relationship between inflation and the Argentina government's acute budget deficit.

Step-by-step explanation:

The relationship between inflation and the Argentina government's acute budget deficit is that the deficit caused inflation. When a government has a large budget deficit, it often finances it by printing more money. This increase in the money supply leads to more money chasing fewer goods, which in turn drives up prices and causes inflation.