McqMate
| Q. |
Deficit financing is an instrument of - |
| A. | monetary policy |
| B. | credit policy |
| C. | fiscal policy |
| D. | tax policy |
| Answer» C. fiscal policy | |
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Explanation: In economics, fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are government taxation and expenditure. 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. |
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