Question

The term **'fiscal deficit'** primarily represents:

• A. The total expenditure of the government.
• B. The government’s total borrowings for the year.
• C. The difference between government revenue and expenditure.
• D. The government's outstanding debt from previous years.

Answer 1

Answer:

B. The government’s total borrowings for the year.

• Fiscal deficit measures the total borrowing requirements of the government to meet its total expenditure, which is why it is equal to the gap between total expenditure and total receipts excluding borrowings.