Deficit financing means __________.

financing budgetary deficit by borrowing

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financing budgetary deficit by printing money

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both A & B

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none of the above

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Solution

The correct option is C both A & B
Deficit financing means filling the gap between government revenue and government expenditure in a government budget either by borrowing funds from central bank/public or printing currency. Deficit financing aims at matching of overall government expenditures with the overall government revenue.

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