In the context of the Indian economy, non-financial debt includes which of the following? 1. Housing loans owed by households 2. Amounts outstanding on credit cards 3. Treasury bills Select the correct answer using the code given below:
- A. 1 only
- B. 1 and 2 only
- C. 3 only
- D. 1, 2 and 3
Answer: D
Explanation
Non-financial debt consists of credit instruments issued by governmental entities, households and businesses that are not included in the financial sector. (The financial sector comprises commercial banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds and other smaller financial entities). Non-financial debt includes household or commercial loans, Treasury bills and credit card balances. They share most of the same characteristics with financial debt, except the issuers are non-financial. Hence correct answer is option (d).