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Question
Identify & explain the concept from the given illustration
Reserve Bank of India helps to raise loans for both the Central and State Governments by selling government bonds, securities etc.
Solution
Concept: Public debt
Explanation:
- The government expenditure generally exceeds government revenue. Hence, government raises debt (loan) with the help of RBI through sale of government bonds, securities etc.
- Since the given illustration is about loans raised by Central and State Governments with the RBI’s help, it is related to the concept of ‘public debt’.
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RELATED QUESTIONS
Government borrows from its citizens, banks, central bank etc. is known as ______.
Assertion (A): Raising debt is the most common activity of any government.
Reasoning (R): Government expenditure generally exceeds government revenue.
The primary purpose of deficit financing is ______.
What do you mean by public debt?
Mention any three methods of redemption of public debt.
Explain the methods of debt redemption.
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Give an economic term:
Debt is raised by the government from borrowings from its citizens.
