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WAEC Economics 1996 Question 28

Question 28

Public Finance

Deficit financing means

  1. A.receiving grants from the IMF
  2. B.having budget surplus
  3. C.excessive government spending on banks
  4. D.borrowing to finance a budget
  5. E.inadequate supply of money from the finance companies
Show the answer and explanation

Answer: D (borrowing to finance a budget)

Explanation

Deficit financing is when government spends more than its revenue and borrows to cover the gap.