Question

Deficit financing leads to inflation in general, but it can be checked if
A.government expenditure leads to increase in the aggregate supply in ratio of aggregate demand
B.only aggregate demand is increased
C.all the expenditure is denoted national debt payment only
D.All of the above

Answer 1

ĀNSWĒR ⏬

d.all of the above

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Answer 2

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Deficit financing leads to inflation in general, but it can be checked if government expenditure leads to increase in the Aggregate Supply (AS) in ratio of Aggregate Demand.

What is Deficit Financing ?

When the expenditure is higher than the revenue, then this budgetary situation is known as Deficit Financing .