| Consider the following: |
| 1. Fiscal Deficit is important as the Government's ability to help growth and welfare increases. |
| 2. Government can always return the loans when its revenue improves due to tax buoyancy. Which of these statements is/are correct? |
A) Only 1
B) Only 2
C) Both 1 and 2
D) neither 1 nor 2
Correct Answer: C
Solution :
Fiscal deficit is not necessarily a bad thing, always. For example, if the money that the Government had borrowed was used to increase the amount of wheat production, then the inflation could have been avoided.
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