About Government Budget and Fiscal Policy

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Consider the following statements :

I. Capital receipts create a liability or cause a reduction in the assets of the Government.

II. Borrowings and disinvestment are capital receipts.

III. Interest received on loans creates a liability of the Government.

Which of the statements given above are correct?

(a) I and II only

(b) II and III only

(c) I and III only

(d) I, II and III 

Correct Answer: (a) I and II only

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