HI, When there is a Deficit in the Budjet,govt will manage by borrowings,actuall from where,how government will borrow,what will be effects of these borrowings.
The level of government borrowing is an important part of fiscal policy and management of aggregate demand in any economy. When the government is running a budget deficit, it means that in a given year, total government expenditure exceeds total tax revenue.
If the government is running a budget deficit, it has to borrow this money through the issue of government debt such as Treasury Bills and long-term government bonds. The issue of debt is done by the central bank and involves selling debt to the bond and bill markets. Most of the government debt is bought up by financial institutions but individuals can buy bonds, premium bonds and buy national savings certificates.
Hi Raj..
ReplyDeleteNice Blogging ...
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Dev...
what?
ReplyDeleteThe level of government borrowing is an important part of fiscal policy and management of aggregate demand in any economy. When the government is running a budget deficit, it means that in a given year, total government expenditure exceeds total tax revenue.
ReplyDeleteIf the government is running a budget deficit, it has to borrow this money through the issue of government debt such as Treasury Bills and long-term government bonds. The issue of debt is done by the central bank and involves selling debt to the bond and bill markets. Most of the government debt is bought up by financial institutions but individuals can buy bonds, premium bonds and buy national savings certificates.
ReplyDeleteRajasekar pls make this as an knowledge hub for BW\BO related modules by giving valubale informations .
ReplyDeleteMake this as an discussion spot for all our friends to improvise and gain knowledge on BW\BO.