Economics · Fiscal Policy
According to the Twin Deficit hypothesis, an increase in fiscal deficit, ceteris paribus, may lead to:
- 1Appreciation of domestic currency due to fiscal expansion
- 2Reduction in capital inflows
- 3Deterioration in current account balance✓
- 4Improvement in current account balance
Correct answer
Deterioration in current account balance
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Want more practice questions on Fiscal Policy?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Fiscal Policy