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 primingYou need to login to perform this action.
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