48. Consider the following equations
1. Budget deficit= Total expenditure- Total Receipts
2. Primary deficit= Fiscal deficit- Interest payments
Select the correct option
48. Consider the following equations
1. Budget deficit= Total expenditure- Total Receipts
2. Primary deficit= Fiscal deficit- Interest payments
Select the correct option
The correct option is C c) Both 1 and 2 are true
Answer: C
Explanation: A budget deficit is an indicator of financial health in which expenditures exceed revenue. The term budget deficit is most commonly used to refer to government spending rather than business or individual spending, but can be applied to all of these entities.
A revenue deficit occurs when the net income generated, revenues less expenditures, falls short of the projected net income. This happens when the actual amount of revenue received and/or the actual amount of expenditures do not correspond with budgeted revenue and expenditure figures. This is the opposite of a revenue surplus, which occurs when the actual amount of net income exceeds the projected amount.
c) Both 1 and 2 are true
Answer: C
Explanation: A budget deficit is an indicator of financial health in which expenditures exceed revenue. The term budget deficit is most commonly used to refer to government spending rather than business or individual spending, but can be applied to all of these entities.
A revenue deficit occurs when the net income generated, revenues less expenditures, falls short of the projected net income. This happens when the actual amount of revenue received and/or the actual amount of expenditures do not correspond with budgeted revenue and expenditure figures. This is the opposite of a revenue surplus, which occurs when the actual amount of net income exceeds the projected amount.
