The correct answer is: b) Excess of expenditure over revenue.
Fiscal deficit is the difference between a government’s total expenditure and total revenue over a particular period of time, usually a year. A fiscal deficit occurs when a government spends more money than it receives in revenue. This can happen for a number of reasons, such as a recession, a war, or a large infrastructure project.
There are a number of ways to finance a fiscal deficit. One way is to borrow money by issuing bonds or treasury bills. Another way is to print more money. However, both of these methods can have negative consequences, such as higher interest rates or inflation.
A fiscal deficit can be a sign of economic weakness, but it is not always a bad thing. In some cases, a fiscal deficit can be used to stimulate the economy during a recession. However, it is important to keep the deficit under control, as too much debt can lead to financial problems for the government.
Explanation of each option:
- Option a) Excess of revenue over expenditure: This is called a budget surplus. It is the opposite of a fiscal deficit.
- Option b) Excess of expenditure over revenue: This is called a fiscal deficit. It is the correct answer to the question.
- Option c) Balanced budget: This is when a government’s total expenditure is equal to its total revenue.
- Option d) Self-sufficiency in revenue generation: This is when a government is able to generate enough revenue to cover its expenses without borrowing money.