SSC Economics Sample Paper NCERT Sample Paper-3

  • question_answer
    Deficit financing is the phrase used to:
    1. Describe the financing of gap between government receipts and expenditure.
    2. It is financed by printing fresh money by the RBI. Which of these statements is/are correct?

    A)  Only 1 

    B)  Only 2

    C)  Both 1 and 2    

    D)  neither 1 nor 2

    Correct Answer: C

    Solution :

    [c] Government spending in excess of revenues so that a budget deficit is incurred, which is financed by borrowing recommended by Keynesian economists in order to increase economic activity and reduce unemployment. Also called compensatory finance, pump priming

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