Economics · Budget Deficit
What are the two primary methods used by governments to finance a budget deficit?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Decreasing tax rates and reducing domestic borrowing
- 2Freezing administrative salaries and suspending foreign trade
- 3Borrowing from market/central bank and deficit financing through currency creation✓
- 4Abolishing indirect taxes and increasing subsidies
Correct answer
Borrowing from market/central bank and deficit financing through currency creation
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