Question

A Revenue Deficit occurs when:

Options

• Capital expenditure exceeds non-debt creating capital receipts

• Total expenditure exceeds total receipts

• Revenue expenditure exceeds revenue receipts

• Revenue receipts exceed revenue expenditure

Answer 1

A Revenue Deficit arises specifically when revenue expenditure exceeds revenue receipts, i.e., the government's regular, day-to-day spending is greater than its regular income. The excess of total expenditure over total receipts relates to the fiscal deficit instead.