Advertisements
Advertisements
प्रश्न
A large amount of fiscal deficit proves to be counter productive. Give any two reasons in support of this statement.
उत्तर
A large fiscal deficit occurs when the government's spending exceeds its revenues. This can be counter productive for two reasons:
- Increased Borrowing and Interest Rates: Governments typically borrow money to cover fiscal deficits, which can cause interest rates to rise. Investors face higher borrowing costs as interest rates rise. This results in a crowding-out effect that stifles economic growth as private sector spending falls in reaction to increasing borrowing costs.
- Future Tax Burden and Inflation: To repay debt, the government may need to raise taxes in the future, placing a burden on future generations. If the government chooses to finance the deficit by printing additional money, it may cause inflation, impeding future growth.
APPEARS IN
संबंधित प्रश्न
Fiscal deficit equals :
(a) Interest payments
(b) Borrowings
(c) Interest payments less borrowing
(d) Borrowing less interest payments
Distinguish between revenue deficit and fiscal deficit.
Define fiscal deficit
State the relation between marginal revenue and average revenue.
Suppose marginal propensity to consume is 0.75 and there is a 20 per cent proportional income tax. Find the change in equilibrium income for the following (a) Government purchases increase by 20 (b) Transfers decrease by 20.
Does public debt impose a burden? Explain.
What do you understand by G.S.T?
Regressive tax is that which is ______.
Fiscal deficit = ______.
| S. No. | Content | Rs (in crores) |
| 1. | Revenue Expenditure | 100 |
| 2. | Capital Receipts | 40 |
| 3. | Net Borrowings | 38 |
| 4. | Net Interest Payments | 27 |
| 5. | Tax Revenue | 50 |
| 6. | Non-tax Revenue | 15 |
Which of the following is the formula for revenue deficit?
Read the following statements carefully and choose the correct alternatives given below:
Statement 1: Fiscal Deficit = Total Budget Expenditure - Total Budget Receipts (Net of borrowing)
Statement 2: Primary Deficit = Fiscal Deficit + Interest Payments.
When the revenue receipts are less than the revenue expenditures in a government budget, this shortfall is termed as
Which of the following statements are correct
Statement 1: Fiscal deficits are not necessarily inflationary; though, they are generally regarded as inflationary.
Statement 2: When the government expenditure increases and tax reduces, there is a government deficit and there will be a corresponding increase in the aggregate demand.
______ are the transactions between the residents of two countries that take place due to consideration of profit.
Which of the following points are related to the current alarm?
Fiscal deficit equals:
How good is the system of G.S.T as compared to the old tax system?
