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Consider the following statements.
1. Budgetary deficits can't be financed by printing money
2. Governments have mostly relied on borrowing, giving rise to what is called government debt
3. Debt can be thought of as a flow which add to the stock of deficit
Which of these statements are not correct?
  • a)
    1 and 2 Only
  • b)
    2 and 3 Only
  • c)
    1 and 3 Only
  • d)
    1 only
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements. 1. Budgetary deficits can't be fin...
  • Budgetary deficits must be financed by either taxation, borrowing or printing money. Governments have mostly relied on borrowing, giving rise to what is called government debt.
  • The concepts of deficits and debt are closely related. Deficits can be thought of as a flow which adds to the stock of debt. If the government continues to borrow year after year, it leads to the accumulation of debt and the government has to pay more and more by way of interest These interest payments themselves contribute to the debt.
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Consider the following statements. 1. Budgetary deficits can't be financed by printing money2. Governments have mostly relied on borrowing, giving rise to what is called government debt3. Debt can be thought of as a flow which add to the stock of deficitWhich of these statements are not correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) 1 onlyCorrect answer is option 'C'. Can you explain this answer?
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Consider the following statements. 1. Budgetary deficits can't be financed by printing money2. Governments have mostly relied on borrowing, giving rise to what is called government debt3. Debt can be thought of as a flow which add to the stock of deficitWhich of these statements are not correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) 1 onlyCorrect answer is option 'C'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements. 1. Budgetary deficits can't be financed by printing money2. Governments have mostly relied on borrowing, giving rise to what is called government debt3. Debt can be thought of as a flow which add to the stock of deficitWhich of these statements are not correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) 1 onlyCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements. 1. Budgetary deficits can't be financed by printing money2. Governments have mostly relied on borrowing, giving rise to what is called government debt3. Debt can be thought of as a flow which add to the stock of deficitWhich of these statements are not correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) 1 onlyCorrect answer is option 'C'. Can you explain this answer?.
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