Question

What is relation between government deficit and government debt?

पर्याय

• Government deficit is the excess of total expenditure over total receipt of the government; whereas, government debt is the amount of liability, owed by the  government.

• The term government deficit implies an increase in the debt of the government. In other words, if the government continues to borrow to finance the deficit, it leads to additional debt.

• Both Government deficit is the excess of total expenditure over total receipt of the government; whereas, government debt is the amount of liability, owed by the  government. and The term government deficit implies an increase in the debt of the government. In other words, if the government continues to borrow to finance the deficit, it leads to additional debt.

• None of the above

Answer 1

Both Government deficit is the excess of total expenditure over total receipt of the government; whereas, government debt is the amount of liability, owed by the  government. and The term government deficit implies an increase in the debt of the government. In other words, if the government continues to borrow to finance the deficit, it leads to additional debt.

Explanation:

The following points can be used to explain the relationship between government deficit and government debt.

1. Government debt is the amount owing by the government to the public, foreign, and other institutions, whereas government deficit is the amount of liability owed by the government to the public, foreign, and other institutions.
2. The word "government deficit" refers to a growth in the government's debt. To put it another way, if the government continues to borrow to cover its deficits, it will end up with more debt.