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Question

If borrowings and other liabilities are added to budget deficit we get ___________.


A
Total receipts
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B
Total expenditure
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C
Fiscal deficit
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D
None of above
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Solution

The correct option is D Fiscal deficit
Fiscal deficit occurs when the government's total expenditure exceeds the revenue that it generates which excludes money from the borrowings. When expenditure exceeds revenues it is called as budget deficit. Hence, when borrowings and liabilities are added to the budget deficit we get fiscal deficit.

Economics

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