- 5 Marks
PT – Aug 2022 – L2 – Q1b – Overview of the Ghanaian Tax System and Fiscal Policy
State five conditions that justify deficit financing by the government.
Question
Deficit financing is the budgetary situation where government expenditure is higher than government revenue. It is a practice adopted for financing the excess expenditure with external funding. Most governments both in the developed and developing world are having deficit budgets, and these deficits are often financed through borrowing.
Required:
State FIVE (5) conditions that would make it necessary for a government to support its budget through deficit financing. (5 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Budget Deficit, Deficit Financing, Fiscal Policy, Government Borrowing
- Level: Level 2
- Topic: Overview of the Ghanaian Tax System and Fiscal Policy
- Series: AUG 2022
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