Multiple choice

Directions: Choose the correct option for the given question.

Increase in net RBI credit for Central Government represents

  1. Budgetary Deficit

  2. Revenue Deficit

  3. Fiscal Deficit

  4. Monetised Deficit
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Monetised Deficit (also called Monetised Fiscal Deficit) occurs when the RBI extends credit to the government. Increase in net RBI credit for the Central Government represents monetised deficit, where the government's borrowing is financed by printing money.

Keep practicing — related questions