Which one of the following expenditures is subtracted from Fiscal Deficit to arrive at Primary Deficit?
Interest payments
The correct answer is Interest payments.
The Primary Deficit measures the government's fresh borrowing requirement excluding the cost of servicing past debt. It is defined as:
\(\text{Primary Deficit} = \text{Fiscal Deficit} - \text{Interest Payments}\)
A zero primary deficit means the government is borrowing only to pay interest on existing debt, and no new expenditure obligations are being financed by borrowing. Defence expenditure, subsidies and pensions are all part of regular revenue/capital expenditure and are not subtracted while computing the primary deficit.
Similar Questions
- Which one of the following situations can lead to inflation ?
The sustained decrease in the general price level is called as
Which one of the following is a measure that can be used by the Government for combatting inflation?
Which one of the following indices is now used by the Reserve Bank of India to measure the rate of inflation in India?
Which of the following is/are example(s) of ‘Near Money’?
1. Treasury Bill
2. Credit Card
3. Savings accounts and small time deposits
4. Retail money market mutual funds
Select the correct answer using the code given below:Which of the following with regard to the term ‘bank run’ is correct?
Which of the following action(s) by the Government would lead to contraction of money supply in the economy?
1. Purchase of Treasury Bills by the central bank from public
2. Sale of Treasury Bills by the central bank to public
3. Sale of foreign exchange by the central bank
4. Purchase of foreign exchange by the central bank
Select the correct answer using the code given below:
Which of the following are included in the definition of Narrow Money?
1. Currency with the public
2. Demand deposits
3. 'Other' deposits with Reserve Bank of India
4. Banker's deposits with Reserve Bank of India
Select the correct answer using the code given below:
Which one of the following taxes is not subsumed under the Goods and Services Tax in India?
Other things remaining constant, the market supply for a good increases if:
1. its price increases.
2. price of its factors of production decreases.
3. price of other goods decreases.
Select the correct answer using the code given below:
Important Questions from Money and Banking
What is an annual statement of receipts and expenditure of the government over a fiscal year is known as?
Bank rate is decided by which of the following agencies?
Which of the following money transfer systems allows 24*7*365 transfer of money?
What is the ratio of money held by public in currency to that they hold in bank deposits called?
__________refers to a deposit into a bank account or a financial institution with no specified maturity date.
