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CPT Section C General Economics Chapter 6 Unit 6 
Manish Dua 
Page 2


CPT Section C General Economics Chapter 6 Unit 6 
Manish Dua 
MCQ’s 
Page 3


CPT Section C General Economics Chapter 6 Unit 6 
Manish Dua 
MCQ’s 
Q.1: The excess of total expenditure over total receipts is called 
(a) Budget Deficit 
(b) Revenue Deficit 
(c) Primary Deficit 
(d) Fiscal Deficit 
Answer: (a)  
Page 4


CPT Section C General Economics Chapter 6 Unit 6 
Manish Dua 
MCQ’s 
Q.1: The excess of total expenditure over total receipts is called 
(a) Budget Deficit 
(b) Revenue Deficit 
(c) Primary Deficit 
(d) Fiscal Deficit 
Answer: (a)  
(a) Budget Deficit 
(b) Revenue Deficit 
(c) Primary Deficit 
(d) Fiscal Deficit 
Answer. (d) 
Page 5


CPT Section C General Economics Chapter 6 Unit 6 
Manish Dua 
MCQ’s 
Q.1: The excess of total expenditure over total receipts is called 
(a) Budget Deficit 
(b) Revenue Deficit 
(c) Primary Deficit 
(d) Fiscal Deficit 
Answer: (a)  
(a) Budget Deficit 
(b) Revenue Deficit 
(c) Primary Deficit 
(d) Fiscal Deficit 
Answer. (d) 
(a) Non Tax revenue 
(b) Interest payments 
( c) Tax Revenue 
(d) Revenue Receipts 
Answer . (d) 
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FAQs on MCQ - Budget and Fiscal Deficit in India - Business Economics for CA Foundation

1. What is the meaning of budget deficit in India?
Ans. Budget deficit in India refers to the situation when the government's total expenditure exceeds its total revenue in a fiscal year. It is an indication of the government's borrowing requirements to bridge the gap between expenditure and revenue.
2. What is fiscal deficit and how does it differ from budget deficit?
Ans. Fiscal deficit is the difference between the government's total expenditure and its total revenue excluding borrowings. It represents the amount that the government needs to borrow to meet its expenses, including interest payments. While budget deficit considers all government borrowings, fiscal deficit only takes into account borrowings from the market and the central bank.
3. How is fiscal deficit calculated in India?
Ans. Fiscal deficit in India is calculated by subtracting the government's total revenue (excluding borrowings) from its total expenditure. The formula for calculating fiscal deficit is as follows: Fiscal Deficit = Total Expenditure - (Revenue Receipts + Non-Debt Capital Receipts).
4. What are the implications of high fiscal deficit in India?
Ans. High fiscal deficit can have several implications for the Indian economy. It can lead to increased government borrowing, which puts upward pressure on interest rates. It also increases the risk of inflation and reduces the availability of credit for private investment. Moreover, high fiscal deficit can negatively impact investor confidence and lead to a slowdown in economic growth.
5. How does the government finance its fiscal deficit in India?
Ans. The government finances its fiscal deficit in India through various means. It can borrow from domestic and international markets, issue government securities, and seek loans from international financial institutions. The government can also resort to monetization of the deficit by borrowing from the central bank. Additionally, disinvestment and privatization of public sector assets can also be used to finance the fiscal deficit.
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