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37 vote

Excess of public expenditure over public revenue leads to :

Asked on by | Votes 37 | Views: 164 | Tags: general knowledge     | miscellaneous     | Add Bounty

Excess of public expenditure over public revenue leads to :
1). Current capital formation
2). Surplus financing
3). Deficit Financing
4). Inflation


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1 answers

34 vote
Answered by on | Votes 34 |
Deficit financing occurs when government spend more and revenue that it receiving is less, so government has to borrow more from the market to make up deficit .In short means government policy of financing large public expenditure s by borrow money rather than by raising taxes.

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