Economy
2020
Basic Economic Terms
Banking in India
In the context of the Indian economy, non-financial debt includes which of the following?
- Housing loans owed by households
- Amounts outstanding on credit cards
- Treasury bills Select the correct answer using the code given below:
A.1 only
C.3 only
D.1, 2 and 3
B.1 and 2 only
Correct Answer: Option D
Non-financial debt comprises credit instruments issued by governmental entities, households, and businesses that are not part of the financial sector.
The financial sector includes entities like commercial banks, insurance companies, non-banking financial companies, cooperatives, pension funds, and mutual funds.
Non-financial debt examples include:
- Household or commercial loans
- Treasury Bills
- Credit card balances
These debts share characteristics with financial debt, except that the issuers are non-financial entities.
Therefore, all the given statements are correct.
Hence, option (d) is the correct answer.
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