A persistent increase in the share of government revenue devoted to interest payments most directly reduces the funds available for:
Correct answer: B. Public development spending
- A. Debt servicing
- B. Public development spending
- C. Past tax collection
- D. Existing interest payments
Explanation
When interest payments consume a larger share of revenue, fewer public funds remain for development projects and other services. Debt servicing itself is the expenditure that has increased, not the spending category being displaced.
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About Economy of Pakistan
Pakistan's economy is examined through agriculture, industry, services, trade, remittances, employment, population, poverty and regional development. The topic also covers GDP and national income, inflation, fiscal and monetary policy, taxation, public debt, the balance of payments, energy constraints and structural challenges, including the role of the State Bank and development planning.
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