Q91
Deficit financing leads to inflation in general, but it can be checked if
A.
government expenditure leads to increase in the aggregate supply in ratio of aggregate demand
B.
only aggregate demand is increased
C.
all the expenditure is denoted national debt payment only
D.
All of the above
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Deficit financing leads to inflation in general, but it can be checked if government expenditure leads to increase in the aggregate supply in ratio of aggregate demand, only aggregate demand is increased and all the expenditure is denoted national debt payment only.