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JAMB Economics 1988 Question 40

Question 40

Public Finance

Deficit financing is mostly facilitated by the existence of

  1. A.stock exchange market
  2. B.commercial bank
  3. C.central bank
  4. D.capital market.
Show the answer and explanation

Answer: C (central bank)

Explanation

Governments mostly finance deficits by borrowing from the central bank, which can create money for them.