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Below are ways of financing budget deficit;
a. Government can print more currency notes through the Central Bank. This can lead to inflation if the volumes of production do not match the increase in money supply.
b. Government can also borrow internally by selling treasury bills, certificates, and bonds in order to raise funds. This may lead to an increase in national debt.
c. Government can borrow from richer nations, IMF, World Bank. This may lead to increase in national debt.
d. Government may receive foreign aid from international organizations to finance deficit budget.
e. Raising taxes.
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