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The Government : Budget And The Economy
Question
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Primary deficit equals: (Choose the correct alternative)
(1) (a) Borrowings (b) Interest payments (c) Borrowings less interest payments (d) Borrowings and interest payments both

Answer

The correct option is (c). Primary deficit is the difference between the fiscal deficit and interest payment. It determines the amount of borrowing which is necessary for the government to pay for the expenses other than interest payments.
Primary deficit = Fiscal deficit − Interest payment.

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Some More Questions From The Government : Budget And The Economy Chapter

Explain the two components (revenue budget and capital budget) of government budget.  

What do you understand by Budget Receipts (Govt. Receipts)? Describe its two types.

Differentiate between Revenue Receipts and Capital Receipts.

Describe components of Revenue Receipts (Receipts from tax revenue and non tax revenue).
or
Distinguish between Tax and non-tax revenue. Name two sources of non-tax revenue receipts.  

Explain components of Capital Receipts.
or
Name two sources of Capital Receipts.
or
Why is recovery of loan treated as a capital receipt? 

Giving reasons categorise the following into revenue receipts and capital receipts. 
(i) Recovery of loans, (ii) Corporation tax, (iii) Dividend on investment made by govt. (iv) Sale of public sector undertaking.

Define a tax.    

Distinguish between Direct and Indirect taxes.
or
What is the basis of classifying taxes into direct tax and indirect tax? Give an example of each. 

Classify the following into direct and indirect tax. Give reasons.
(i) Wealth tax, (ii) Entertainment tax, and (iii) Income tax. 

What is meant by Budget (Government) Expenditure? Describe its components (items).