Deficit financing implies

A. printing new currency notes

B. replacing new currency with worn out currency

C. public expenditure in excess of public revenue

D. public revenue in excess of public expenditure

Answer: Option C

Solution(By Examveda Team)

Deficit financing means generating funds to finance the deficit which results from excess of expenditure over revenue. The gap being covered by borrowing from the public by the sale of bonds or by printing new money.