5.2.1 - Measures of Government Deficit
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Practice Questions
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What is revenue deficit?
💡 Hint: Think about what happens when spending exceeds income.
Why is the fiscal deficit important?
💡 Hint: Consider what it represents in terms of financial health.
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Interactive Quizzes
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What is a revenue deficit?
💡 Hint: What occurs when spending outpaces income?
True or False: Fiscal deficit indicates the total amount the government needs to borrow.
💡 Hint: Is it related to borrowing needs of the government?
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Challenge Problems
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A government has a total expenditure of $1 billion, with total receipts of $800 million. Calculate the fiscal deficit and the primary deficit if the interest payments on existing debt are $100 million.
💡 Hint: Use the formulas correctly to find the answers.
If a country has a revenue deficit representing 5% of its GDP, discuss the implications this may have on future borrowing and economic policy.
💡 Hint: Consider how sustained borrowing can affect economic stability.
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