Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:

Which of the following gives the correct measure of "Primary deficit"?

Options:

Revenue deficit - Fiscal deficit

Revenue deficit - Interest payments

Difference between Capital and Revenue expenditure

Fiscal deficit - Interest payments

Correct Answer:

Fiscal deficit - Interest payments

Explanation:

Primary deficit refers to the difference between the current year's fiscal deficit and interest payment on previous borrowings. It indicates the borrowing requirements of the government, excluding interest. It also shows how much of the government's expenses, other than interest payment, can be met through borrowings.

Primary deficit = Fiscal deficit - Interest payments