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Assertion (A): Fiscal deficit is measured in terms of borrowings. Reason (R): External borrowings increases the Fiscal deficit. -

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Question

Assertion (A): Fiscal deficit is measured in terms of borrowings.

Reason (R): External borrowings increases the Fiscal deficit.

Options

  • Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A). 

  • Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A). 

  • Assertion (A) is true, but Reason (R) is false. 

  • Assertion (A) is false, but Reason (R) is true.

MCQ

Solution

Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).

Explanation:

The difference between total expenditure and total receipts, excluding borrowings, is known as the fiscal deficit. It indicates the government's borrowing needs.

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Measures of Government Deficit Or Surpluses
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