Which of the following statement(s) is/are correct?
A. Only I
B. Only II
C. Both I and II
D. Neither I nor II
Answer:C
Which of the following statement(s) is/are correct?
A. Only I B. Only II C. Both I and II D. Neither I nor II
Explanation: The excess of total government spending above the national income (i.e. fiscal deficit) is known as the inflationary gap. This is intended to increase the production level which ultimately pushes the prices up due to extra-creation of money during the process.