Increased borrowing
Inflation
Reduced investment in public services
All of the above
Answer is Right!
Answer is Wrong!
The correct answer is: All of the above.
A high fiscal deficit is a situation where a government spends more money than it takes in through taxes and other revenue. This can lead to a number of problems, including:
- Increased borrowing: When a government spends more money than it takes in, it has to borrow the difference. This can lead to a large national debt, which can be difficult to repay.
- Inflation: When a government borrows a lot of money, it can put upward pressure on prices. This is because the government has to pay interest on its debt, which adds to the overall demand for goods and services.
- Reduced investment in public services: When a government has a large fiscal deficit, it may have to cut back on spending on public services, such as education, healthcare, and infrastructure. This can have a negative impact on the quality of life for citizens.
In conclusion, a high fiscal deficit can be a cause for concern as it may lead to a number of problems, including increased borrowing, inflation, and reduced investment in public services.