Question

Fiscal deficit equals: (Choose the correct alternative)

• A. Primary deficit minus interest payments
• B. Primary deficit plus interest payments
• C. Total budget expenditure minus total budget receipts
• D. None of the above

Answer 1

The correct option is A Primary deficit minus interest payments

Primary deficit is the difference between fiscal and interest payment. While, fiscal deficit shows borrowing requirement of the government inclusive of interest payment on the accumulated national debt, primary deficit shows borrowing requirement of the government exclusive of interest payment.