Multiple choice

Which of the following is/are included in "Deficit Financing in India"? (1) Borrowing from Reserve Bank of India (2) Issue of New Currency Notes (3) Withdrawal of past balances/surpluses etc.

  1. Only 1

  2. Only 2

  3. Only 3

  4. All 1,2 & 3

  5. None of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Deficit financing involves government spending in excess of revenue, which is covered by borrowing from the central bank, printing new currency, or using cash balances.

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