Question

_________ means financing of a budget deficit by borrowing from the central bank or printing more money.

• A. Deficit financing
• B. Fiscal adjustment
• C. Budget financing
• D. Treasury management

Answer 1

Answer: (A)

Deficit financing

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 is done so that overall government expenditures matches with overall government income.