An increase in money supply without a corresponding increase in production can lead to inflation.
What is the effect of deficit financing on economy?
Asked in UPPCS Prelims 2016 · Topic: Fiscal Policy & Revenue (Fiscal Deficits: Concepts, measures, and financing of deficits)
More Economic Development questions
- If interest payments arc subtracted from gross fiscal deficit, the remainder will be
- As compared to revenue deficit, fiscal deficit will always remain
- Primary deficit in the Union Budget for 2010-11 is estimated at
- After deducting grants for the creation of Capital assets from revenue deficit, we arrive at
- Fiscal deficit/GDP ratio has been maximum in the financial year
- Statement-I: Fiscal deficit is greater than budgetary deficit. Statement-II: Fiscal deficit is the borrowings from the Reserve Bank of India plus other liabilities of the Government to meet its expenditure.
- Match List I with List II and select the correct answer using the codes given below the Lists: List I List II (Term) (Explanation) I. Fiscal de‐ A) Excess of Total Expenditure ficit over Total Receipts II. Budget B) Excess of Revenue Expenditure deficit over Revenue Receipts C) Excess of Total Expenditure III. Revenover Total Receipts less borrowue deficit ings D) Excess of Total Expenditure IV. Primary over Total Receipts less borrowdeficit ings and Interest Payments
- With reference to the Indian Public Finance consider the following statements: 1. External liabilities reported in Union Budget are based on historical exchange rates 2. The continued high borrowing has kept the real interest rates high in the economy 3. The upward trend in the ratio of Fiscal Deficit to GDP in recent years has an adverse effect to private investments. 4. Interest payments is the single largest component of the non-plan revenue expenditure of the Union Government. Which of these statements are correct?
