Question

Which of the following is a measure of a state's "fiscal health"?

• A. The ratio of fiscal deficit to Gross State Domestic Product (GSDP)
• B. The total amount of state debt
• C. The growth rate of state government revenue
• D. The number of public sector employees in the state

Answer 1

Answer:

A. The ratio of fiscal deficit to Gross State Domestic Product (GSDP)

• The fiscal deficit as a percentage of GSDP is a key indicator of a state's fiscal health, as it shows the extent to which the government is spending beyond its means relative to the size of its economy.