Question : When a government borrows money to finance its expenditures, it is known as:
Option 1: Deficit financing
Option 2: Balanced budget financing
Option 3: Surplus financing
Option 4: None of the above
Correct Answer: Deficit financing
Solution : The correct answer is (a) Deficit financing.
When a government borrows money to finance its expenditures, it is referred to as deficit financing. Deficit financing occurs when the government's total expenditures exceed its total revenues, leading to a budget deficit. To cover this deficit, the government borrows money from various sources such as issuing bonds, obtaining loans from domestic or foreign entities, or utilizing other forms of debt.
Question : Case Study 22:
DEF Ltd. is a well-established company planning to expand its global operations through acquisitions.
Question :
To finance its acquisition plans, DEF Ltd. is evaluating short-term financing options. Which money market instrument might it use?
Option 1: Commercial paper
Option 2: Call money
Option 3: Treasury bill
Option 4: Corporate bond
Question : When domestic currency gains value in relation to a foreign currency in the international market, it is termed as a situation of:
Option 1: Currency Depreciation
Option 2: Currency Appreciation
Option 3: Currency Devaluation
Option 4: None
Question : How did the resolution of language conflicts impact national integration in India?
Option 1: It led to further division
Option 2: It strengthened national unity
Option 3: It had no significant impact
Option 4: It increased external influences
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile