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JAMB Economics 2010 Question 35

Question 35

Public Finance

In Nigeria, the huge public debt is as a result of

  1. A.balanced budgeting
  2. B.deficit budgeting
  3. C.surplus budgeting
  4. D.zero budgeting.
Show the answer and explanation

Answer: B (deficit budgeting)

Explanation

A deficit budget spends more than revenue, and the gap is borrowed, which builds up public debt.