Economy, asked by koyelde2003, 10 months ago

explain the role of deficit financing to control the deficit demand?

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Answered by priyanka0506

1

$\huge\underline\mathcal\blue{Question}$

explain the role of deficit financing to control the deficit demand?

$\huge\purple{\boxed{\boxed {answer }}}$

As there is no excess capacity in the economy, such increased money income results in an increased aggregate expenditure— thereby fuelling inflationary rise in prices. ... But deficit financing immediately releases monetary resources leading to excessive monetary aggregate demand which creates demand-pull inflation.

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