Practicing Success
When government fiscal deficit is equal to interest payment of government then Primary Deficit will be : |
Positive Negative Equal to 1 Zero |
Zero |
The correct answer is option (4) : Zero 1. Primary deficit= Total revenue - Total expenditure excluding interest payments on its debt 2. Primary deficit = Fiscal deficit - Interest payment. The interest payment will be the payment that a government makes on borrowings to the creditors. 3. The primary deficit tends to be zero when the fiscal deficit equals the interest payment. |