what is deficit financing and how it is important in our economy?explain.
Dear student,
Deficit financing refers to government borrowings from the Central Bank in the form of new currency notes.
It is important in our economy in following ways:
* It increase the circulation of money in economy.
* It divert resources from unproductive to productive sector.
* It finance defence expenditure during war time.
* It increase capital formation.
Regards
Deficit financing refers to government borrowings from the Central Bank in the form of new currency notes.
It is important in our economy in following ways:
* It increase the circulation of money in economy.
* It divert resources from unproductive to productive sector.
* It finance defence expenditure during war time.
* It increase capital formation.
Regards