Are the following statements true or false? Give reasons.
Fiscal deficit is non-inflationary.
Fiscal deficit is non-inflationary.
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False.
Reason: Fiscal deficit can be inflationary when we are at full employment level. It is so because large fiscal deficits creates excess money supply that creates inflation.
Reason: Fiscal deficit can be inflationary when we are at full employment level. It is so because large fiscal deficits creates excess money supply that creates inflation.
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