Which of the following factors are not responsible for poverty?A. Infl

1.	Which of the following factors are not responsible for poverty?A. InflationB. Increase in Government expenditureC. Deficit FinancingD. Higher savings and Capital formation1. Only A and C 2. Only B, C and D3. Only B and D 4. Only B and C
Answer» Correct Answer - Option 4 : Only B and C The Correct answer is Only B and C. Inflation increases the prices of food and services. Inflation erodes the value of money, hence poor people have to spend more money to purchase the same amount of goods. Which ultimately increases poverty among the people. Hence statement A is incorrect. When the government goes for an increase in expenditure then the money in the market gets redistributed to the people. The government implements this measure to increase the money supply in the market. This increases economic activities in the economy and ultimately leads to a reduction of poverty among people. Hence statement B is correct. Deficit financing is another way of increasing the money supply in the market so it also helps in the reduction of poverty. Hence statement C is correct. Higher savings leads to higher capital formation. This increases economic activities in the economy and ultimately leads to a reduction of poverty among people. Hence statement D is incorrect.

Which of the following factors are not responsible for poverty?A. InflationB. Increase in Government expenditureC. Deficit FinancingD. Higher savings and Capital formation1. Only A and C 2. Only B, C and D3. Only B and D 4. Only B and C

Answer» Correct Answer - Option 4 : Only B and C

The Correct answer is Only B and C.

Inflation increases the prices of food and services.
- Inflation erodes the value of money, hence poor people have to spend more money to purchase the same amount of goods. Which ultimately increases poverty among the people.
- Hence statement A is incorrect.
When the government goes for an increase in expenditure then the money in the market gets redistributed to the people.
- The government implements this measure to increase the money supply in the market.
- This increases economic activities in the economy and ultimately leads to a reduction of poverty among people.
- Hence statement B is correct.
Deficit financing is another way of increasing the money supply in the market so it also helps in the reduction of poverty.
- Hence statement C is correct.
Higher savings leads to higher capital formation.
- This increases economic activities in the economy and ultimately leads to a reduction of poverty among people.
- Hence statement D is incorrect.