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Question

Which of the following are ways to finance a deficit budget?

A
Taxation
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B
Borrowing
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C
Printing money
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D
Increase government expenditure
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Solution

The correct option is C Printing money
If there is a budget deficit, the government can finance it through taxation, borrowing, or printing money. When a government borrows from its central bank or prints money to fill the gap between its income and expenditure, it is called deficit financing.

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