Which is/are the correct gains for Government of India if inflation rate has increased, using the code given below :
1. Cost of interest declines
2. Tax collections rise
3. Government expenditures decline

Only 1

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1 and 2

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2 and 3

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1,2 and 3

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Solution

The correct option is C 1 and 2
In such a situation government;s expenditures also increase.

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