Question

Define deficit financing? What methods are included in it.

Answer 1

Hey friend!!

Deficit financing is the budgetary situation where expenditure is higher than the revenue. It is a practice adopted for financing the excess expenditure with outside resources. The expenditure revenue gap is financed by either printing of currency or through borrowing.

Types of it are:

•Budget deficit =      total expenditure – total receiptsRevenue deficit =    revenue expenditure – revenue receipts•

Fiscal Deficit = total expenditure – total receipts except borrowings

•Primary Deficit = Fiscal deficit- interest payments•

•Effective revenue Deficit-= Revenue Deficit – grants for the creation of capital  assets

•Monetized Fiscal Deficit = that part of the fiscal deficit covered by borrowing from    the RBI

Answer 2

Deficit financing is a practice in which new funds are made in order to balance the shortage of money by the government.  

Explanation:

• Deficit financing is a condition when the expenditure is more than the revenue by the government.
• The revenue gap is managed by borrowing.
• In developed country such as India it is a method of planned economic development. Also deficit financing brings in a depression of the economy and thus stimulates spending of an individual.
• Deficit financing also is responsible for inflation when the price of products and services increased manifold.  

Learn more about Deficit financing:

What is deficit financing ? Explain its implications for the indian economy?

https://brainly.in/question/6645354

Discuss the effects of deficit financing on Indian Economy.

https://brainly.in/question/8536427