Question

In fiscal deficit, we add borrowings and other liabilities to the_______.

• A. primary deficit
• B. capital deficit
• C. budgetary deficit
• D. money deficit

Answer 1

The correct option is C budgetary deficit

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 cover the gap between total expenditure and total revenue.