Economics · Public Finance
Deficit financing in developing economies like India fundamentally refers to which mechanism?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Financing the budgetary deficit through public borrowing and creation of new money✓
- 2Restricting public expenditure within the limits of current tax revenue
- 3Reducing external borrowings and foreign aid completely
- 4Relying purely on fiscal surpluses of previous years
Correct answer
Financing the budgetary deficit through public borrowing and creation of new money
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