JAMB Economics 2011 Objective — Question 39

Question 39 of 49 from the Joint Admissions and Matriculation Board (JAMB) Economics 2011 Objective paper, with the correct answer and a full explanation.

A country embarks on deficit financing in order to

A. A. reduce aggregate demand
B. B. curb inflation
C. C. stimulate investmentCorrect
D. D. increase revenue

Explanation

Deficit financing is used to stimulate investment. It is an act of financing public expenditure on some projects through borrowing.

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