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Question
Differentiate between productive and unproductive debt.
Distinguish Between
Solution
| Productive debt | Unproductive Debt | ||
| (i) | These debts are incurred by the government for the projects that yield income. | (i) | These debts are those which are incurred on projects which do not yield any income. |
| (ii) | Examples of Productive debt are the construction of power projects, railways, etc. | (ii) | Examples are financing a war or debt used to cover a budget deficit, etc. |
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