Deficit financing refers to the government spending more than it earns through revenue. One method of financing this deficit, particularly in earlier times, was borrowing from the central bank (Reserve Bank of India in India), often involving printing more currency or creating credit. This is a form of debt monetization.
Deficit financing means that the government borrows money from the
Asked in APSC CCE Prelims Exam 2015 · PPSC CS Prelims 2018 · Topic: Fiscal Policy & Revenue (Fiscal Deficits: Concepts, measures, and financing of deficits)
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