Fiscal Deficit

A fiscal deficit occurs when a government’s aggregate expenditures surpass its revenue generated. This is excluding the money from borrowings. Deficit is different from debt. Debt is basically an accumulation of year on year deficits. Some consider a fiscal deficit as a positive economic occurrence. Famous economics John Maynard Keynes opined that deficits actually assist nations in climbing out of economic recessions. However, fiscal conservatives believe that deficits should be avoided by the government which should be inclined towards a balanced budget policy.

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