Which of the following factors is/are responsible for the recent rapid slow down of the Indian economy despite recovering from the global financial crisis. The boost to demand given by monetary and fiscal stimulus following the crisis was large. Starting in 2011-12, corporate and infrastructure investment started slowing both as a result of investment bottlenecks as well as the tighter monetary policy. Select the correct answer using the codes given below Options: A . &nbspBoth 1 and 2 B . &nbspOnly 2 C . &nbspOnly 1 D . &nbspNeither 1 nor 2

Which of the following factors is/are responsible for the recent rapid slow down

Question

Which of the following factors is/are responsible for the recent rapid slow down of the Indian economy despite recovering from the global financial crisis.

The boost to demand given by monetary and fiscal stimulus following the crisis was large.

Starting in 2011-12, corporate and infrastructure investment started slowing both as a result of investment bottlenecks as well as the tighter monetary policy.

Select the correct answer using the codes given below

Options:

A . Both 1 and 2

B . Only 2

C . Only 1

D . Neither 1 nor 2

Answer: Option A
Answer: (a)
Factors responsible for this are given below:
The boost to demand given by monetary and fiscal stimulus following the crisis was large. Final consumption grew at an average of over 8% annually between 2009-10 and 2011-12. The result was strong inflation and a powerful monetary response that also slowed consumption demand.
Beginning in 2011-12 corporate and infrastructure investments started slowing both as a result of investment bottlenecks as well as the tighter monetary policy.

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