Which one of the following is/are not included in the traditional budget deficit?a)Draw down of cashb)Short term financing from RBIc)Long term financing from RBId)All of the aboveCorrect answer is option 'C'. Can you explain this answer?

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Which one of the following is/are not included in the traditional budget deficit?

a)
Draw down of cash
b)
Short term financing from RBI
c)
Long term financing from RBI
d)
All of the above

Correct answer is option 'C'. Can you explain this answer?

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Which one of the following is/are not included in the traditional bud...

There are different measures of deficits in macroeconomics and each type of deficit measure carries a different macroeconomic meaning.
Gross Fiscal Deficit is defined as the excess of the total expenditure of the government over the total non- debt creating receipts.
Traditional Budget Deficit also referred to as simply ‘budget deficit’ is that part of the government’s deficit that is financed through short-term borrowings. These short-term borrowings may be from the RBI or from other sources. Normally, short-term borrowings from the RBI are through the net issuance of short-term treasury bills and by running down the central government’s cash balances held by the RBI.
Monetized deficit Also known as the ‘net reserve bank credit to the government’, it is that part of the government deficit which is financed solely by borrowing from the RBI.

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Which one of the following is/are not included in the traditional budget deficit?a)Draw down of cashb)Short term financing from RBIc)Long term financing from RBId)All of the aboveCorrect answer is option 'C'. Can you explain this answer?

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