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Fiscal deficit is necessarily inflationary in …

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Fiscal deficit is necessarily inflationary in nature do you agree? Support your answer with valid reason
  • 1 answers

Komal Poddar? 5 years, 11 months ago

Yes....fiscal Deficit means borrowing ....borrowing increases supply of money ....increase demand at full employment ( means AS will not rise ) so ultimate option is to increase the prices n it implies a situation of inflation
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