The term 'deficit financing', means:

More expenditure and getting more finances to fund projects

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Seeking NRI investments to make up for lack of finance to fund private sector projects

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To meet the deficit funds for government projects from the savings of the people

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Financing of gap between public expenditure and public revenue

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Solution

The correct option is D Financing of gap between public expenditure and public revenue
Deficit financing means covering of the gap between government revenue and government expenditure in a government budget by borrowing funds from central bank or public. Deficit financing is done so that overall government expenditures matches with overall government income.

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Similar questions

Q. Deficit financing aims to put more money into the economy by creating additional paper currency to fill the gap between expenditure and revenue. The device aims at economic development but if it fails, it generates _____.

Q. Deficit financing creates additional paper currency to fill the gap between expenditure and revenue. This device aims at economic development. But if it fails, it generates ______________.

Q. When a government borrows from the RBI or prints money to fill the gap between its income and expenditure, it is called deficit financing.

Which of the following aspect of public finance is correct, if the theory of public finance deals only with public revenue, public expenditure and public debt in an objective manner?

Q. Fiscal deficit is that part of government expenditure which is financed by ___________.

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