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When the deficit is high, what happens t...

When the deficit is high, what happens to prices?

A

Prices decrease

B

there is no direct impact on prices

C

Prices remain stable

D

Prices increase

Text Solution

Verified by Experts

The correct Answer is:
D
When the deficit is high then mainly government borrows from reserve bank of India or sells it property(Disinvestment), printing of new notes is also an option this increases the liquidity in the market which eventually causes condition of inflation in the market And thus the price increases.
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PINNACLE-ECONOMICS-MCQ (NATIONAL INCOME, IFLATION, BUDGET, TAXATION AND GDP)
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  2. A substantial increase in capital expenditure or revenue deficit leads...

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  3. When the deficit is high, what happens to prices?

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  4. What is the economic impact of increase in productivity of firms?

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  5. What is the full form of GSTIN in relation to GST?

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  6. In which year was the Central Board of Revenue Act in India promulgate...

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  9. is the final value of all the finished goods and services produced wit...

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  10. Which of the following are the major state taxes in India?

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  11. How many members are there in the GST Council?

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  12. What is the meaning of Fiscal Deficit ?

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  13. Fiscal Policy is formulated by in India.

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  14. GST council is headed by :

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  15. GST is NOT applicable on which of the following goods or services?

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  16. What is the National Gross Domestic Product(GDP)?

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  19. is a type of direct Tax which is levied at the time of sale/purchase o...

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  20. Which of the following statements regarding Goods and Services Tax is ...

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