WBCS.LIVE practice question

Fiscal deficit is -

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Total expenditure — Total receipts
  2. Revenue expenditure — Revenue receipts
  3. Capital expenditure — Capital receipt — Borrowings
  4. Sum of budget deficit and Government’s market borrowings and Liabilities

Correct answer and explanation

Correct answer: Sum of budget deficit and Government’s market borrowings and Liabilities

Explanation: ✅ Correct Answer: D) Sum of budget deficit and Government’s market borrowings and Liabilities 📚 Explanation: Fiscal Deficit is a key economic indicator that reflects the total borrowing requirements of the government in a financial year. It is mathematically calculated as the sum of the budget deficit and the government's total market borrowings and liabilities. It represents the gap between the government's total expenditure and its non-debt receipts. Managing this deficit is essential for controlling inflation and ensuring long-term macroeconomic stability.