Question: 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:
Options:
(A) Both Statement I and Statement II are correct
(B) Both Statement I and Statement II are incorrect
(C) Statement I is correct and Statement II is incorrect
(D) Statement I is incorrect and Statement II is correct
Answer: B