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Are fiscal deficits necessarily inflationary ? …

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Are fiscal deficits necessarily inflationary ? Explain in detail .

    • Posted by Navjot Singh 6 years, 8 months ago

    CBSE > Class 12 > Economics
    • 1 answers

    Esha Sharma 6 years, 8 months ago

    The RBI prints new currency to finance the fiscal deficit.This will increase the money supply in the economy leading to inflation. But if it is done for infrastructural development like building of dams,bridges etc then it may not be inflationary.

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