Multiple Choice Questions on Effective Revenue Deficit is the difference between nbs........... for General Studies (Level 1) Preparation

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Multiple Choice Questions

Effective Revenue Deficit is the difference between nbs...........

Indian Economy (Easy) Budgeting and Fiscal policy
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    Effective Revenue Deficit is the difference between                   .

    Revenue deficit and grants for creation of capital assets

    Correct Answer

    Revenue deficit and grants for creation of current assets

    Incorrect Answer

    Revenue deficit & investment in securities

    Incorrect Answer

    Revenue deficit & interest payments

    Incorrect Answer
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    Explanation:

    - Option 1: Effective Revenue Deficit is calculated as the Revenue Deficit minus the grants-in-aid for the creation of capital assets. This concept was introduced to understand the portion of revenue deficit that does not lead to asset creation.

    - Option 2: Grants for the creation of current assets are not considered in calculating Effective Revenue Deficit.

    - Option 3: Investment in securities is not part of the calculation for Effective Revenue Deficit.

    - Option 4: Interest payments are not directly subtracted from the Revenue Deficit to determine Effective Revenue Deficit.

    By: Gagandeep Singh
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