alleryStart learning →In 2024-25 the fiscal deficit was 5.6 per cent of GDP and interest payments were 3.6 per cent. The primary deficit was
A9.2 per cent
B3.6 per cent
C2.0 per cent
D1.6 per cent
Answer & Solution
Correct answer: C. 2.0 per cent
1. Primary deficit = fiscal deficit - interest payments.
2. Substituting: 5.6 - 3.6.
3. = **2.0 per cent of GDP**, which is exactly the figure in Table 5.1.
4. Adding the two instead gives 9.2, which is the revenue receipts line and a deliberate trap here.
_Source: syllabus Introductory Macroeconomics, Ch 5 "Government Budget and the Economy", section 5.2.1 Measures of Government Deficit_
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