Question

Consider the following definitions and find out the NOT correct ones:
1. Fiscal Consolidation : aims at eliminating Fiscal debt
2. Subsidy : is a parliamentary grant to the sovereign for state needs.
3. Fiscal deficit : is the difference between the government’s expenditures and its revenues including the money it has borrowed

• A. All of the Above
• B. Only 2 & 3
• C. Only 1
• D. Only 1 & 3

Answer 1

The correct option is D Only 1 & 3

• Fiscal Consolidation: It is a reduction in the underlying fiscal deficit. However, it is not aimed at eliminating fiscal debt.
• Fiscal deficit: It is the difference between the government's expenditures and its revenues (excluding the money it has borrowed)
• Inflation: Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every rupee we own buys a smaller percentage of a good or service
• Deflation: Deflation is the general decline in prices, often caused by a reduction in the supply of money or credit. Deflation can be caused also by a decrease in government, personal or investment spending