I. On the assumption that the equilibrium cash GDP ratio will be lower than before November 8, the banking system will benefit from a higher level of deposits. Thus, market interest rates deposits, lending, and yields on government securities should be lower in 201718 than 2016 17. |
II. Despite decline in central government's fiscal deficit from 4.5 per cent of GDP in 2013-14 to 4.1 per cent, 3.9 per cent, and 3.5 per cent in the following years, fiscal policy needs to balance the cyclical imperatives with medium term issues relating to prudence and credibility. |
III. Create a public sector asset reconstruction company so that the twin balance sheet problem can be addressed, facilitating credit and investment revival. |
A) Only I is correct
B) Only II is correct
C) I, II & III are correct
D) Neither I nor II is correct
Correct Answer: C
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