Question

A Budget Deficit refers to a situation where:

Options

• The government spends more than its receipts

• Interest payments exceed the primary deficit

• The government's receipts exceed its spending

• Revenue expenditure equals revenue receipts

Answer 1

A budget deficit exists when the government's total spending exceeds its total receipts (revenue). It is the broadest notion of deficit, from which specific measures such as the Revenue Deficit, Fiscal Deficit and Primary Deficit are derived.