Economics · Fiscal Policy

Examine the following statements about 'Monetized Deficit' and 'Debt Sustainability': Statement I: Monetized Deficit refers to the part of the government's deficit that is financed by direct borrowing from the central bank, leading to an expansion in the monetary base. Statement II: Public debt sustainability is generally achieved when the real growth rate of the GDP is higher than the real interest rate on government debt. Statement III: The total 'Debt-to-GDP Ratio' of India traditionally evaluated by rating agencies includes only the liabilities of the Union Government and completely excludes those of the State Governments. Statement IV: A persistently high Debt-to-GDP ratio can lead to a credit rating downgrade by international agencies like Moody's or S&P. Which of the above are correct?