Given below are two statements:
Statement I: Deficit financing cannot create inflation in an economy.
Statement II: If RBI reduces the cash reserve ratio, the credit creation will decline.
In the light of the above statements, choose the most appropriate answer from the options given below:
1
Both Statement I and Statement II are correct
2
Both Statement I and Statement II are incorrect
3
Statement I is correct and Statement II is incorrect
4
Statement I is incorrect and Statement II is correct
5
Question Not Attempted