Question

Fiscal deficit equals __________.

• A. total expenditure less total revenue receipts and capital receipts, but excluding borrowings and other liabilities
• B. budget deficit plus borrowings and other liabilities
• C. both A and B
• D. neither A nor B

Answer 1

Answer: (C)

both A and B

Fiscal deficit is the excess of total government expenditure (revenue expenditure + capital expenditure) over total government receipts (revenue receipts + capital other than borrowings) plus total borrowings of the government. It measures the borrowings of the government which government takes from central bank or public in order to fill the gap between total expenditure and total revenue.