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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
‘The fiscal deficit gives the borrowing requirement of the government’. Elucidate.
Give the relationship between the revenue deficit and the fiscal deficit.
Explain why the tax multiplier is smaller in absolute value than the government expenditure multiplier.
Discuss the issue of deficit reduction.
Answer the following question.
In the given figure, what does the gap 'KT' represent? State any two fiscal measures to correct the situation.
The primary deficit in a government budget is ______.
| S. No. | Content | Rs (in crores) |
| 1. | Revenue Expenditure | 100 |
| 2. | Capital Receipts | 40 |
| 3. | Net Borrowings | 38 |
| 4. | Net Interest Payments | 27 |
| 5. | Tax Revenue | 50 |
| 6. | Non-tax Revenue | 15 |
Which of the following is the formula for revenue deficit?
Assertion (A): Fiscal deficit is measured in terms of borrowings.
Reason (R): External borrowings increases the Fiscal deficit.
When the revenue receipts are less than the revenue expenditures in a government budget, this shortfall is termed as
______ in the budget is an important measure of deficit.
The difference between fiscal deficit and interest payment is known as ______
What is relation between government deficit and government debt?
If India exports goods worth ₹20 crores and imports goods worth ₹30 crores, it will have a ______
Which of the following points are related to the current alarm?
Which of the following statements is true?
Primary deficit is borrowing requirements of government for making:
Fiscal Deficit equals:
Identify which of the following statements is true.
A large amount of fiscal deficit proves to be counter productive. Give any two reasons in support of this statement.
