Explain four ways that a government can use to finance a budget deficit.( 8 marks)

Ways that a government can use to finance a budget deficit.

• (Inflationary financing) Borrowing from the central bank through overdrafts / short term loans / accept use of examples to explain.
• Borrowing from international money markets / agencies / financial institutions / non- banking financial institutions such as IBRD / IMF /World Bank / PBR / provides funds / revenue for government / accept use of examples.
• Borrowing from capital markets such as ICDC / insurance companies / AFC / NPCK / procedure by selling bonds.
• Borrowing from domestic money markets such as commercial banks / selling treasury bills and / bonds / promissory notes / I.O.U.
• Borrowing from other countries / multilateral / Bilateral borrowing through loans / buying goods / services on credit.
• Borrowing from members of the public by selling treasury bills / bonds/ promissory notes.
• Grants / donations / from donor countries / finances / individuals.
• Printing more currencies
• Imposing conditions / new / taxation in related goods / services / increased government revenue / raise funds.

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