Question
Consider the following statements:
Select the correct answer using the code given below:
- Fiscal deficit increases aggregate demand in the economy
- Fiscal deficit is financed by borrowing from RBI
Select the correct answer using the code given below:
Answer: Option C
Answer: (c)
When government incurs a fiscal deficit, the expenditure leads to an increase in total demand in the economy.
RBI is not allowed to lend to Government for the long term fiscal deficit bonds as per the FRBM Act 2003.
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Answer: (c)
When government incurs a fiscal deficit, the expenditure leads to an increase in total demand in the economy.
RBI is not allowed to lend to Government for the long term fiscal deficit bonds as per the FRBM Act 2003.
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