Computing Fiscal deficit
In government budget, primary deficit is Rs. 10,000 crores and interest payment is Rs. 8,000 crores. Compute the fiscal deficit?
Expert
Primary deficit = Fiscal deficit – interest payments
=>Fiscal deficit = Primary deficit + Interest payments.
= 10,000 + 8,000 = 18,000 crores.
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Implications of fiscal deficit: (A) High fiscal deficit entails a big amount of borrowings in which the government takes more loans to pay back it. It raises the liability of government. Discover Q & A Leading Solution Library Avail More Than 1413376 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads No hassle, Instant Access Start Discovering 18,76,764 1947523 Asked 3,689 Active Tutors 1413376 Questions Answered Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! Submit Assignment
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