Question : ____________________ leads to inflationary trends in the economy due to more money supply.
Option 1: Borrowings
Option 2: Deficit financing
Option 3: Fiscal deficit
Option 4: Primary deficit.
Answer (1)
24th Jan, 2024
Correct Answer:
Deficit financing
Solution :
Borrowings are considered a better source as they do not increase the money supply. Deficit financing increases inflation in the economy due to more money supply.
Hence, Option B is correct.
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