Multiple Choice Questions on In what respect lsquo Budget Deficit rsquo and lsquo Fiscal Deficit rsquo are different from each ot........... for UPSC Civil Services Examination (General Studies) Preparation

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Multiple Choice Questions

In what respect lsquo Budget Deficit rsquo and lsquo Fiscal Deficit rsquo are different from each ot...........

Economic Affairs Public Finance and Debt Management
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    In what respect ‘Budget Deficit’ and ‘Fiscal Deficit’ are different from each other?

    1.    Budget Deficit is planned and is always good for an economy.

    2.    Fiscal Deficit is actual overrun of government expenditure and is purely a poor financial management

    Codes

    Only 1

    Incorrect Answer

    Only 2

    Incorrect Answer

    Both 1 and 2

    Incorrect Answer

    Neither 1 nor 2

    Correct Answer
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    Explanation:
    Both statements are incorrect. 
    A fiscal deficit occurs when a government's total expenditures exceed the revenue that it generates, excluding money from borrowings. 
    Budgetary deficit is the difference between all receipts and expenses in both revenue and capital account of the government. 
    Budgetary deficit is the sum of revenue account deficit and capital account deficit. If revenue expenses of the government exceed revenue receipts, it results in revenue account deficit. 

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