Question

The Revenue Deficit is always a part (sub-component) of which deficit?

Options

• Interest Payments

• Revenue Receipts

• Primary Deficit

• Fiscal Deficit

Answer 1

The Revenue Deficit is always a sub-component of the Fiscal Deficit, since the government's revenue-side gap is financed out of its total borrowing needs. In contrast, the Primary Deficit is obtained by subtracting interest payments from the Fiscal Deficit.