Download App

Government Budget and Economy — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsGovernment Budget and Economy1 Mark
Question
Are fiscal deficits necessarily inflationary?
✓

Answer

Yes, if fiscal deficits is financed by issuing new currency it will increase inflation. It may be worsen if new currency used to finance the current consumption expenditure of the government. It new money is used for infrastructural activities or other capital projects, then fiscal deficit will not be inflationary.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "Answer The Following Questions In One Sentence.[1 Marks Each]" from Government Budget and Economy→Government Budget and Economy — all question types→Economics STD 12 Humanities & Commerce question papers→Rajasthan Board STD 12 Humanities & Commerce question papers→Rajasthan Board question paper generator→

Similar questions

What does balance of payments account of a country record?
→
What is proportional tax?
→
How is Net Domestic Product calculated?
→
In what manner does Average Revenue of a monopoly firm change as output increases?
→
What is the difference between GNPFC, and GNPMP?
→
Will the following items be included or not in National Income of India? Give reason for your answer.
Old-age pensions given by the government.
→
What are selling cost?
→
When is a firm called 'price-taker'?
→
What do you mean by total utility?
→
Categorize the following items into Revenue and Capital Expenditure.
Statement-Amount spent on construction of Bridges.
→