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Zero Primary Deficit in an economy indicates which of the following?
  • a)
    Entire borrowings of the Government are used to make interest payments.
  • b)
    Zero interest payments by the Government.
  • c)
    The Government is not borrowing money to make interest payments.
  • d)
    The Government is not borrowing money to bridge the deficit. 
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Zero Primary Deficit in an economy indicates which of the following?a)...
Primary deficit is calculated as Fiscal deficit – Interest payments. Hence, Zero Primary Deficit means that the entire borrowings of the Government are used to make interest payments. 
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Zero Primary Deficit in an economy indicates which of the following?a)Entire borrowings of the Government are used to make interest payments.b)Zero interest payments by the Government.c)The Government is not borrowing money to make interest payments.d)The Government is not borrowing money to bridge the deficit.Correct answer is option 'A'. Can you explain this answer?
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