Question

    Deficit Financing creates additional Paper currency to

    fill the gap between expenditure and revenue. This device aims at economic development but if it fails, it generates:
    A Inflation Correct Answer Incorrect Answer
    B Deflation Correct Answer Incorrect Answer
    C Demonetisation Correct Answer Incorrect Answer
    D Devaluation Correct Answer Incorrect Answer

    Solution

    Inflation is a general increase in prices and fall in the purchasing value of money.

    Practice Next

    Relevant for Exams: