Question

Primary Deficit Equals:

Answer 1

(a) Borrowings

(b) Interest payments

(c) Borrowings less interest payments

(d) Borrowings and interest payments both

Answer: (c) Borrowings less interest payments

Primary deficit = Fiscal deficit – Interest payments

It is regarded as the difference between fiscal deficit and interest payments. The value of the primary deficit helps in understanding the amount that needs to be borrowed by the government for paying off the expenses other than the interest payments.

Also read:

• Budget Deficit
• Primary Deficit
• Fiscal Deficit

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