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प्रश्न
Are fiscal deficits inflationary?
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उत्तर
Fiscal deficits are not necessarily inflationary; though, they are generally regarded as inflationary. When the government expenditure increases and tax reduces, there is a government deficit and there will be a corresponding increase in the aggregate demand. However, the firms might not be able to meet the growing demands, forcing the price to rise. Hence fiscal deficits are inflationary in this sense.
But on the other hand, initially if the resources are underutilised (due to insufficient demand) and output is below full employment level, then with the increase in government expenditure, more factor resources will be employed to cater to the increasing demand without exerting much pressure on price to rise. In this situation, a high fiscal deficit is accompanied by high demand, greater output level and lesser inflationary situation. Hence, whether the fiscal deficits are inflationary or not depends on how close is the original output level to the full employment level.
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संबंधित प्रश्न
Fiscal deficit equals :
(a) Interest payments
(b) Borrowings
(c) Interest payments less borrowing
(d) Borrowing less interest payments
Consider an economy described by the following functions:- C = 20 + 0.80Y, I = 30, G = 50, TR = 100 (a) Find the equilibrium level of income and the autonomous expenditure multiplier in the model. (b) If government expenditure increases by 30, what is the impact on equilibrium income? (c) If a lump-sum tax of 30 is added to pay for the increase in government purchases, how will equilibrium income change?
Consider an economy described by the following functions:- C = 20 + 0.80Y, I = 30, G = 50, TR = 100, calculate the effect on output of a 10 per cent increase in transfers, and a 10 per cent increase in lump-sum taxes. Compare the effects of the two.
We suppose that C = 70 + 0.70Y D, I = 90, G = 100, T = 0.10Y (a) Find the equilibrium income. (b) What are tax revenues at equilibrium Income? Does the government have a balanced budget?
Discuss the issue of deficit reduction.
Regressive tax is that which is ______.
Fiscal deficit = ______.
The primary deficit in a government budget is ______.
______ are the transactions between the residents of two countries that take place due to consideration of profit.
Identify the correctly matched pair of the items in Column A to those in Column B:
| Column A | Column B | ||
| 1 | Fiscal Deficit | (a) | Other than interest payments |
| 2 | Primary Deficit | (b) | Borrowings less interest payments |
| 3 | Revenue Deficit | (c) | Borrowings |
| 4 | Tax Deficit | (d) | Borrowings in government budget |
Which of the following statements is true?
Fiscal Deficit equals:
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The three main measures of government deficit are:
If a government's revenue expenditure is ₹700 crore and its revenue receipts are ₹550 crore, the Revenue Deficit is:
The Revenue Deficit is always a part (sub-component) of which deficit?
If Total Expenditure is ₹1,200 crore, Revenue Receipts are ₹800 crore and Non-Debt Creating Capital Receipts are ₹100 crore, the Fiscal Deficit equals:
The Primary Deficit shows the borrowing requirement of the government:
