Government Budget and Economy — Economics STD 12 Commerce — Question
CBSE BoardEnglish MediumSTD 12 CommerceEconomicsGovernment Budget and Economy3 Marks
Question
What do you mean by primary deficit? Explain its implications.
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Answer
Primary deficit is equal to fiscal deficit less of interest payments. Primary Deficit = Fiscal Deficit - Interest PaymentsImplications of primary deficit are:
It indicates borrowing requirements of the government to meet fiscal deficit net of interes payments.
It enables us to see the way, the government is currently conducting its financial affairs.
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