Current Affairs Exam > Current Affairs Questions > Consider the following statements regarding P...
Start Learning for Free
Consider the following statements regarding Primary deficit.
1. The sum of the fiscal deficit and interest payments is the primary deficit.
2. It contains the debt from the past.
Which of the above statements is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'D'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
Consider the following statements regarding Primary deficit.1. The sum...
Primary Deficit = Fiscal Deficit – Interest Payments
- The government's total borrowing requirement includes the interest commitments on accumulated debts.
- Primary deficit reflects the extent to which such interest commitments have compelled the government to borrow in the current period.
- It excludes the past debt burden and shows the net increase in the government's indebtedness due to the current year's fiscal operations. A reduction in primary deficit is reflective of government's efforts at bridging the fiscal gap during a financial year.
Most Upvoted Answer
Consider the following statements regarding Primary deficit.1. The sum...
Explanation:
The primary deficit is an important concept in fiscal policy and public finance. It refers to the difference between the government's total expenditure (excluding interest payments) and its total revenue. Let's analyze the given statements:
Statement 1: The sum of the fiscal deficit and interest payments is the primary deficit.
This statement is incorrect. The primary deficit is calculated by subtracting interest payments from the fiscal deficit, not by adding them. The fiscal deficit represents the excess of the government's total expenditure over its total revenue, including interest payments. By subtracting interest payments from the fiscal deficit, we obtain the primary deficit, which reflects the government's expenditure and revenue situation excluding the interest burden.
Statement 2: It contains the debt from the past.
This statement is also incorrect. The primary deficit does not include the debt from the past. It only considers the current expenditure and revenue situation. The primary deficit provides an important measure of the government's ability to finance its current expenditure without relying on borrowing or accumulating additional debt.
Conclusion:
Neither of the given statements is correct. The primary deficit is calculated by subtracting interest payments from the fiscal deficit and does not include the debt from the past. It is an important indicator of the government's fiscal sustainability and its ability to manage its expenditure and revenue situation without relying on borrowing.
The primary deficit is an important concept in fiscal policy and public finance. It refers to the difference between the government's total expenditure (excluding interest payments) and its total revenue. Let's analyze the given statements:
Statement 1: The sum of the fiscal deficit and interest payments is the primary deficit.
This statement is incorrect. The primary deficit is calculated by subtracting interest payments from the fiscal deficit, not by adding them. The fiscal deficit represents the excess of the government's total expenditure over its total revenue, including interest payments. By subtracting interest payments from the fiscal deficit, we obtain the primary deficit, which reflects the government's expenditure and revenue situation excluding the interest burden.
Statement 2: It contains the debt from the past.
This statement is also incorrect. The primary deficit does not include the debt from the past. It only considers the current expenditure and revenue situation. The primary deficit provides an important measure of the government's ability to finance its current expenditure without relying on borrowing or accumulating additional debt.
Conclusion:
Neither of the given statements is correct. The primary deficit is calculated by subtracting interest payments from the fiscal deficit and does not include the debt from the past. It is an important indicator of the government's fiscal sustainability and its ability to manage its expenditure and revenue situation without relying on borrowing.
Free Test
FREE
| Start Free Test |
Community Answer
Consider the following statements regarding Primary deficit.1. The sum...
Primary Deficit = Fiscal Deficit – Interest Payments
- The government's total borrowing requirement includes the interest commitments on accumulated debts.
- Primary deficit reflects the extent to which such interest commitments have compelled the government to borrow in the current period.
- It excludes the past debt burden and shows the net increase in the government's indebtedness due to the current year's fiscal operations. A reduction in primary deficit is reflective of government's efforts at bridging the fiscal gap during a financial year.
Attention Current Affairs Students!
To make sure you are not studying endlessly, EduRev has designed Current Affairs study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Current Affairs.
|
Explore Courses for Current Affairs exam
|
|
Top Courses for Current AffairsView all
Consider the following statements regarding Primary deficit.1. The sum of the fiscal deficit and interest payments is the primary deficit.2. It contains the debt from the past.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer?
Question Description
Consider the following statements regarding Primary deficit.1. The sum of the fiscal deficit and interest payments is the primary deficit.2. It contains the debt from the past.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? for Current Affairs 2024 is part of Current Affairs preparation. The Question and answers have been prepared according to the Current Affairs exam syllabus. Information about Consider the following statements regarding Primary deficit.1. The sum of the fiscal deficit and interest payments is the primary deficit.2. It contains the debt from the past.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Current Affairs 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Primary deficit.1. The sum of the fiscal deficit and interest payments is the primary deficit.2. It contains the debt from the past.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer?.
Consider the following statements regarding Primary deficit.1. The sum of the fiscal deficit and interest payments is the primary deficit.2. It contains the debt from the past.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? for Current Affairs 2024 is part of Current Affairs preparation. The Question and answers have been prepared according to the Current Affairs exam syllabus. Information about Consider the following statements regarding Primary deficit.1. The sum of the fiscal deficit and interest payments is the primary deficit.2. It contains the debt from the past.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Current Affairs 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Primary deficit.1. The sum of the fiscal deficit and interest payments is the primary deficit.2. It contains the debt from the past.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer?.
Solutions for Consider the following statements regarding Primary deficit.1. The sum of the fiscal deficit and interest payments is the primary deficit.2. It contains the debt from the past.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for Current Affairs.
Download more important topics, notes, lectures and mock test series for Current Affairs Exam by signing up for free.
Here you can find the meaning of Consider the following statements regarding Primary deficit.1. The sum of the fiscal deficit and interest payments is the primary deficit.2. It contains the debt from the past.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Consider the following statements regarding Primary deficit.1. The sum of the fiscal deficit and interest payments is the primary deficit.2. It contains the debt from the past.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer?, a detailed solution for Consider the following statements regarding Primary deficit.1. The sum of the fiscal deficit and interest payments is the primary deficit.2. It contains the debt from the past.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of Consider the following statements regarding Primary deficit.1. The sum of the fiscal deficit and interest payments is the primary deficit.2. It contains the debt from the past.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Consider the following statements regarding Primary deficit.1. The sum of the fiscal deficit and interest payments is the primary deficit.2. It contains the debt from the past.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice Current Affairs tests.
|
|
Explore Courses for Current Affairs exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup