Difference between revenue and expenditure
Total outstanding debt
Inflation rate
Economic growth rate
Answer is Right!
Answer is Wrong!
The correct answer is: a) Difference between revenue and expenditure.
Fiscal deficit is the difference between a government’s total revenue and total expenditure during a particular financial year. It is a measure of the government’s borrowing requirement for the year. A fiscal deficit can be financed through borrowing from the central bank, issuing government bonds, or receiving foreign aid.
A fiscal deficit is not necessarily a bad thing. It can be used to finance productive investments that will lead to economic growth. However, if the deficit is too large, it can lead to inflation and debt problems.
The other options are incorrect because:
- Option b) is a measure of a government’s total outstanding debt.
- Option c) is a measure of the rate at which prices are rising in an economy.
- Option d) is a measure of the rate at which the economy is growing.