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    Question

    Identify the correct relationship between various

    deficits. A. Revenue Deficit > Effective Revenue Deficit B. Primary Deficit > Fiscal Deficit C. Fiscal Deficit > Primary Deficit D. Effective Revenue Deficit > Revenue Deficit E. Fiscal Deficit > Revenue Deficit
    A Only A, C and E Correct Answer Incorrect Answer
    B Only B, C and E Correct Answer Incorrect Answer
    C Only A, D and E Correct Answer Incorrect Answer
    D Only C, D and E Correct Answer Incorrect Answer
    E Only A and E Correct Answer Incorrect Answer

    Solution

    If we know how these deficits are calculated then we can easily identify the relation between various deficits. Revenue deficit is the part of Fiscal Deficit means Revenue Deficit > Revenue Deficit. Effective Revenue Deficit = Revenue Deficit – Grands in Aids for Creation of Capital Assets Means Revenue Deficit > Effective Revenue Deficit Primary Deficit = Fiscal Deficit – Interest Payments, this means that Fiscal Deficit > Primary Deficit.

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