[Solved] Beyond a certain point deficit financing will certainly lead to -

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Q.	Beyond a certain point deficit financing will certainly lead to -
A.	inflation
B.	deflation
C.	recession
D.	economic stagnation
Answer» A. inflation
Explanation: Deficit financing is a practice in which a government spends more money than it receives as revenue, the difference being made up by borrowing or minting new funds. Some economists are of the view that it leads to inflation as governments pay off debts by printing fiat money, increasing the money supply and the purchasing power of the people which increases the aggregate demand.

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