Multiple choice

What is the direct effect of deficit financing?

  1. It leads to extra money supply which in turn pushes up prices.

  2. It leads to extra money supply which in turn makes market more and more competitive.

  3. The price situation comes under complete control.

  4. Demand and supply both increase.

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Correct Answer: It leads to extra money supply which in turn pushes up prices.