The biggest demerit of having paper money as currency is that itA. brings inflation to the economy.B. causes deficit in balance of payment.C. adversely affects an agrarian economy.D. demotivates producers to produce goods and services.

The biggest demerit of having paper money as currency is that it brings inflation to the economy.

Here's why:

1. Overproduction of Paper Money: If a government prints too much paper money, it can lead to an oversupply of money in the economy. This can decrease the value of money, as there is more money chasing the same amount of goods and services.

2. Decreased Purchasing Power: As the value of money decreases due to inflation, the purchasing power of consumers also decreases. This means that the same amount of money can buy fewer goods and services.

3. Increased Prices: When there is too much money in the economy, businesses may increase their prices. This is because they know that consumers have more money to spend.

4. Uncertainty: High inflation can create uncertainty in the economy. This can lead to decreased investment and economic growth.

5. Income Redistribution: Inflation can also lead to income redistribution. Those with fixed incomes, such as pensioners, may find that their income buys less as prices rise. On the other hand, those with assets that increase in value with inflation, such as property, may benefit.

So, while paper money is a convenient form of currency, it can lead to inflation if not managed properly.