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 DeficitSolution
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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