Which of the following is implication of fiscal deficit?

CA Foundation · Business Economics · MTP · January 2026
Which of the following is implication of fiscal deficit?
(A) A. Crowding- out
(B) B. Inflationary spiral
(C) C. Erosion of government credibility
(D) D. All of these

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. Erosion of government credibility

Topics: Public Finance

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