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A substantial increase in capital expenditure or revenue deficit leads to ______.
Budgetary Deficit
Fiscal Deficit
Primary Deficit
Revenue Deficit
- Budgetary Deficit: This occurs when total government expenditure exceeds total government revenue. It reflects the overall financial shortfall for a fiscal year.
- Fiscal Deficit: This is the difference between total revenue and total expenditure of the government, including both capital and revenue expenditures. An increase in capital expenditure or revenue deficit typically contributes to the fiscal deficit.
- Primary Deficit: This is the fiscal deficit minus interest payments on previous borrowings. It shows the government's borrowing requirements excluding interest payments.
- Revenue Deficit: This happens when the net amount received (revenue receipts) falls short of the projected net amount to be received.
- Correct Answer: Fiscal Deficit. It captures both capital expenditure and revenue deficits.
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