Multiple choice

If borrowing and other liabilities are added to the budget deficit we get

  1. revenue deficit

  2. capital deficit

  3. primary deficit

  4. fiscal deficit

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Fiscal deficit is the total borrowing requirement of the government, calculated by adding the budget deficit to other liabilities. When government spends more than its revenue, the gap is the budget deficit; including all market borrowing and other liabilities gives the fiscal deficit. Revenue deficit refers only to the excess of revenue expenditure over revenue receipts.

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