Deficit financing aims to put more money into the economy by creating additional paper currency to fill the gap between expenditure and revenue. The device aims at economic development but if it fails, it generates :

Jitendra Singh • 7.50K Points
Tutor III Economic

Q. Deficit financing aims to put more money into the economy by creating additional paper currency to fill the gap between expenditure and revenue. The device aims at economic development but if it fails, it generates :

(A) inflation
(B) devaluation
(C) deflation
(D) demonetisation

Correct Answer - Option(A)

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