General Knowledge - Indian Economy - Discussion
Discussion Forum : Indian Economy - Indian Economy (Q.No. 10)
10.
Deficit financing leads to inflation in general, but it can be checked if
Discussion:
24 comments Page 3 of 3.
Karna Prasad said:
1 decade ago
Answer A is understable. But Answers B and C are not convincing.
Ari said:
1 decade ago
Shanti thanks for your explanation.
Shanti said:
1 decade ago
The definition of deficit financing is likely to vary with the purpose for which such a definition is needed.
In one sense by deficit financing we mean the excess of government expenditure over its normal receipts raised by taxes, fees, and other sources. In this definition such expenditure whether obtained through borrowing or from the banking system measures the budget deficit.Deficit financing is said to have been used whenever government expenditure exceeds its receipts.
In under-developed countries deficit financing may be in two forms:
a) Difference between overall revenue receipts and expenditure
b) Deficit financing may be equal to borrowing from the banking system of the country.
In one sense by deficit financing we mean the excess of government expenditure over its normal receipts raised by taxes, fees, and other sources. In this definition such expenditure whether obtained through borrowing or from the banking system measures the budget deficit.Deficit financing is said to have been used whenever government expenditure exceeds its receipts.
In under-developed countries deficit financing may be in two forms:
a) Difference between overall revenue receipts and expenditure
b) Deficit financing may be equal to borrowing from the banking system of the country.
Puneet said:
1 decade ago
What is deficit financing?
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