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Topic Deficit financing
Asked 5 times across 2 UPSC exams over 30 years (1992–2022), peaking in 2013.
Key insights
- Most tested in CSE — 4 of 5 PYQs
- Most asked in 2013
- Recurs across 4 years (1992–2022)
How it travelled across exams
First appearance in each exam — the same idea, reframed.
CSE 1992 → CDS 2022
How the concept evolved
Long-running — most appearances (3 of 5) predate 2016, and it still returns.
Related concepts
Ideas UPSC tests alongside this one — keep exploring.
Sample questions
You've seen the pattern — here are a few of the actual PYQs.
CDS2022
Who among the following, first mooted the idea of deficit financing ?
- A Adam Smith
- B Alfred Marshall
- C John Maynard Keynes ✓
- D Milton Friedman
✓ Correct answer: (C)
Economy › Macroeconomics
CSE2021
Which one of the following is likely to be the most inflationary in its effects?
- A Repayment of public debt
- B Borrowing from the public to finance a budget deficit
- C Borrowing from the banks to finance a budget deficit
- D Creation of new money to finance a budget deficit ✓
✓ Correct answer: (D)
Economy › Public Finance & Budget
CSE2013
In India, deficit financing is used for raising resources for
- A economic development ✓
- B redemption of public debt
- C adjusting the balance of payments
- D reducing the foreign debt
✓ Correct answer: (A)
Economy › Public Finance & Budget
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