[amp_mcq option1=”more than interest payment” option2=”less than interest payment” option3=”just equal to the interest payment” option4=”None of these ” correct=”option3″]
The correct answer is (c).
Primary deficit is the difference between the government’s total revenue and its total expenditure, excluding interest payments. If the primary deficit is zero, then the government’s total revenue is equal to its total expenditure, excluding interest payments. This means that the government is not borrowing any money to finance its current spending. However, the government may still need to borrow money to finance its capital spending, such as building roads or schools.
Option (a) is incorrect because if the primary deficit is zero, then the government is not borrowing any money to finance its current spending. Therefore, it cannot be borrowing more than interest payments.
Option (b) is incorrect because if the primary deficit is zero, then the government is not borrowing any money to finance its current spending. Therefore, it cannot be borrowing less than interest payments.
Option (d) is incorrect because the government may still need to borrow money to finance its capital spending, even if the primary deficit is zero.