[amp_mcq option1=”Excess of expenditure over revenue” option2=”Excess of revenue over expenditure” option3=”Balanced budget” option4=”Lack of financial planning” correct=”option3″]<\/p>\n
The correct answer is: Excess of expenditure over revenue.<\/p>\n
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 takes in through taxes and other revenue sources.<\/p>\n
There are two main types of fiscal deficits: cyclical and structural. Cyclical deficits are caused by fluctuations in the economy, such as recessions. Structural deficits are caused by long-term problems, such as an aging population or a high level of government debt.<\/p>\n
Fiscal deficits can be financed in a number of ways, including borrowing, printing money, or selling assets. Borrowing is the most common way to finance a fiscal deficit. When a government borrows money, it issues bonds, which are essentially loans that the government promises to repay with interest. Printing money is another way to finance a fiscal deficit, but it can lead to inflation. Selling assets is another way to finance a fiscal deficit, but it can reduce the government’s wealth.<\/p>\n
Fiscal deficits can have a number of economic consequences, both positive and negative. On the positive side, fiscal deficits can help to stimulate the economy during a recession. On the negative side, fiscal deficits can lead to higher interest rates, inflation, and a decrease in the value of the currency.<\/p>\n
The government’s fiscal policy is one of the most important tools that it has to manage the economy. A well-designed fiscal policy can help to promote economic growth and stability. However, fiscal policy can also be used to achieve other goals, such as reducing inequality or promoting social welfare.<\/p>\n
Excess of revenue over expenditure is called a fiscal surplus. A balanced budget occurs when a government’s total expenditure equals its total revenue. Lack of financial planning is not a term that is typically used in economics.<\/p>\n","protected":false},"excerpt":{"rendered":"
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