Macroeconomics: Planned expenditure by a government to put more money into the economy than it takes out by taxation, with the expectation that increased business activity will bring enough additional revenue to cover the shortfall. Also called deficit spending.
Microeconomics: Debt financing to cover excess of expenditure over income.
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Deficit financing is defined as financing the budgetary deficit through public loans and creation of new money. Deficit financing in India means the expenditure which in excess of current revenue and public borrowing. The government may cover the deficit in the following ways.By running down its accumulated cash reserve from RBI.Issue of new currency by government it self.Borrowing from reserve bank of India and RBI gives the loans by printing more currency notes.
Deficit financing results in Governments accelerating the flow of money into the system. This is mainly being done with an intention that availability of money would increase production and create more goods and there is a possibility of demand creation.
this s caused by the adoption of deficit budget of the government. the govt of an underdeveloped country may resort to deficit financing to finance its developmental plans. this may result in a rising price level.
Concept of deficit
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Deficit financing is a state in which the government spends more money than it receives. This results to borrowing of funds to cover the difference.
deficit financing
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1. Federal Government deficit financing may have a very great influence on monetary and credit conditions.
1. Federal Government deficit financing may have a very great influence on monetary and credit conditions.
Deficit Spending
deficit financing adds to public debt because it is regularly spending more than it takes in each year-and then borrows to make up the difference.
Deficit financing is defined as financing the budgetary deficit through public loans and creation of new money. Deficit financing in India means the expenditure which in excess of current revenue and public borrowing. The government may cover the deficit in the following ways.By running down its accumulated cash reserve from RBI.Issue of new currency by government it self.Borrowing from reserve bank of India and RBI gives the loans by printing more currency notes.
deficit financing adds to public debt because it is regularly spending more than it takes in each year-and then borrows to make up the difference.
Deficit financing.