New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    A country with a high level of public debt is facing

    pressure from international investors to reduce its debt burden. The government is considering various options to manage its debt and improve its fiscal sustainability. Which of the following is NOT a sustainable way for the government to reduce its public debt in the long run?
    A Implementing fiscal consolidation measures to reduce the fiscal deficit. Correct Answer Incorrect Answer
    B Promoting economic growth to increase tax revenues. Correct Answer Incorrect Answer
    C Restructuring existing debt to lower interest payments. Correct Answer Incorrect Answer
    D Monetizing the debt by printing more money. Correct Answer Incorrect Answer
    E Increasing taxes on high-income earners. Correct Answer Incorrect Answer

    Solution

    Monetizing the debt by printing more money can lead to hyperinflation and further economic instability. It is not a sustainable solution for reducing public debt.

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