Economics · Deficit Financing
In macroeconomic policy, how is 'Deficit Financing' best described contextually as a fiscal tool?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A mechanism to strictly restrict the credit expansion capabilities of commercial banks by increasing reserve ratios
- 2The mandatory reduction of administrative and developmental expenditures to achieve zero national debt
- 3A method utilized by the government to bridge the gap between total public expenditure and total public revenue receipts✓
- 4The process of generating a large budget surplus to invest in international derivative and commodity markets
Correct answer
A method utilized by the government to bridge the gap between total public expenditure and total public revenue receipts
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