| Assertion [A] Budgetary deficits financed through monetising of debts leads to fall in purchasing power of money. |
| Reason [R] Availability of more money in the economy then required leads to rise in price levels. |
A) Assertion [A] is true and Reason [R] is correct reason of Assertion [A].
B) Assertion [A] is true and Reason [R] is not correct reason of Assertion [A].
C) Assertion [A] is false, but Reason [R] is true
D) Both are false.
Correct Answer: A
Solution :
Monetising of debts means printing of new currency to settle old debts. This leads to increase in money supply in the economy and rise in prices, which further leads to fall in the value of money.
You need to login to perform this action.
You will be redirected in
3 sec
