Class 12 Exam > Class 12 Questions > If primary deficit is 3,000 and interest pay...
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If primary deficit is ₹ 3,000 and interest payment is ₹ 500, the fiscal deficit is
- a)₹ 3,500
- b)₹ 4,000
- c)₹ 4,100
- d)₹ 4,200
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
If primary deficit is 3,000 and interest payment is 500, the fiscal ...
Primary Deficit = Fiscal Deficit - Interest Payment
3,000 = Fiscal Deficit - 500
Fiscal Deficit = 3,000 + 500 = ₹ 3,500
3,000 = Fiscal Deficit - 500
Fiscal Deficit = 3,000 + 500 = ₹ 3,500
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Community Answer
If primary deficit is 3,000 and interest payment is 500, the fiscal ...
Explanation:
To understand the calculation of fiscal deficit, we need to first understand the concept of primary deficit and interest payment.
Primary Deficit:
The primary deficit refers to the budget deficit that excludes interest payments. It represents the difference between government revenue (excluding interest payments) and government expenditure.
In this case, the primary deficit is given as 3,000. This means that the government's total expenditure exceeds its revenue by 3,000, excluding the interest payments.
Interest Payment:
Interest payment refers to the amount of money that the government pays as interest on its outstanding debt. It is a fixed expense that needs to be paid regardless of the primary deficit or surplus.
In this case, the interest payment is given as 500.
Fiscal Deficit:
Fiscal deficit represents the total amount by which the government's expenses exceed its revenue, including interest payments.
To calculate the fiscal deficit, we need to add the primary deficit and the interest payment.
Fiscal Deficit = Primary Deficit + Interest Payment
In this case, the primary deficit is 3,000 and the interest payment is 500.
Fiscal Deficit = 3,000 + 500 = 3,500
Therefore, the correct answer is option 'A', 3,500.
To understand the calculation of fiscal deficit, we need to first understand the concept of primary deficit and interest payment.
Primary Deficit:
The primary deficit refers to the budget deficit that excludes interest payments. It represents the difference between government revenue (excluding interest payments) and government expenditure.
In this case, the primary deficit is given as 3,000. This means that the government's total expenditure exceeds its revenue by 3,000, excluding the interest payments.
Interest Payment:
Interest payment refers to the amount of money that the government pays as interest on its outstanding debt. It is a fixed expense that needs to be paid regardless of the primary deficit or surplus.
In this case, the interest payment is given as 500.
Fiscal Deficit:
Fiscal deficit represents the total amount by which the government's expenses exceed its revenue, including interest payments.
To calculate the fiscal deficit, we need to add the primary deficit and the interest payment.
Fiscal Deficit = Primary Deficit + Interest Payment
In this case, the primary deficit is 3,000 and the interest payment is 500.
Fiscal Deficit = 3,000 + 500 = 3,500
Therefore, the correct answer is option 'A', 3,500.
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If primary deficit is 3,000 and interest payment is 500, the fiscal deficit isa) 3,500b) 4,000c) 4,100d) 4,200Correct answer is option 'A'. Can you explain this answer?
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If primary deficit is 3,000 and interest payment is 500, the fiscal deficit isa) 3,500b) 4,000c) 4,100d) 4,200Correct answer is option 'A'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about If primary deficit is 3,000 and interest payment is 500, the fiscal deficit isa) 3,500b) 4,000c) 4,100d) 4,200Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If primary deficit is 3,000 and interest payment is 500, the fiscal deficit isa) 3,500b) 4,000c) 4,100d) 4,200Correct answer is option 'A'. Can you explain this answer?.
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